2014 (4) TMI 63 - AT - Service Tax

Waiver of pre-deposit - levy of service tax on sub-contractor - Erection, commissioning and installation services, man power recruitment & supply agency services, commercial or industrial construction services - Held that - the claim of the appellant that prior to 23.08.2007, the sub-contractor need not discharge Service Tax liability if the Service Tax liability is discharged by the main contractor, prima facie, seems to be law which has been settled by the various decisions of the Tribunal. Post 23.08.2007, there are views expressed by the Tribunal as to the Service Tax liability on the sub-contractor that needs deeper consideration. Keeping in mind that the appellant has already deposited an amount of Rs.10 lakhs, we still find that the appellant needs to be put to condition of depositing further amount for hearing and disposing the appeal by the first appellate authority - appellant directed to deposit an amount of Rs.5 lakhs - On such compliance being reported, the first appellate authority will restore the appeal to its original number and dispose of the same on merit, after following the principles of natural justice - Decided partly in favour of assessee. - Matter remanded back.

Issues:
1. Stay petition for waiver of pre-deposit of confirmed amounts involving Service Tax liability for specific services.
2. Appeal disposal without consideration of merits and limitation by the first appellate authority.
3. Need for further deposit by the appellant for hearing and disposal of the appeal.

Issue 1: Stay petition for waiver of pre-deposit
The appellant filed a Stay Petition seeking the waiver of pre-deposit of confirmed amounts related to Service Tax liability for services provided under various categories. The adjudicating authority confirmed the amounts for the period between October 2005 to September 2010. The appellate authority upheld the amounts but dismissed the appeal due to non-compliance with the pre-deposit order.

Issue 2: Appeal disposal without consideration of merits and limitation
The first appellate authority directed the appellant to deposit the entire amount of Service Tax liability, interest, and penalty to hear and dispose of the appeal. The appellant argued that the Service Tax liability for the sub-contractor did not arise before 23.08.2007, citing settled law and various judgments. The appellant contended that the first appellate authority did not consider the merits of the case or the issue of limitation before ordering the pre-deposit.

Issue 3: Need for further deposit by the appellant
The Tribunal noted that the issue was narrow, and they could not delve into the merits due to the absence of findings by the first appellate authority on the merits or limitation. The Tribunal acknowledged the settled law regarding Service Tax liability for sub-contractors before 23.08.2007 but highlighted differing views post that date. Considering the appellant had already deposited Rs.10 lakhs, the Tribunal directed an additional deposit of Rs.5 lakhs within eight weeks for the appeal's hearing and disposal by the first appellate authority, emphasizing compliance and the principles of natural justice.

In summary, the judgment addressed the Stay Petition for the waiver of pre-deposit of confirmed amounts related to Service Tax liability for specific services. It highlighted the first appellate authority's failure to consider the merits and limitation before ordering the pre-deposit, leading to the need for further deposit by the appellant to proceed with the appeal's hearing and disposal. The Tribunal provided a detailed analysis of the legal aspects and directed the appellant to comply with the additional deposit requirement within a specified timeframe for the appeal's restoration and disposal on merit.

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