2014 (4) TMI 361 - AT - Service Tax

Waiver of pre-deposit of Service Tax - Commission, brokerage and consultancy charges - nature of receipt - Held that - Prima facie, we find that the major portion of the taxable value i.e. 1.8 crores is claimed to have been received against surrender of tenancy agreement but the applicant could not able to produce any evidence in this context to show that the said amount has been incorrectly included under the brokerage and commission services. No Chartered Accountant s certificate has been produced nor any evidence adduced before the adjudicating authority or before this Tribunal. We also find that the Ld. Commissioner has given a categorical finding about the claim relating to non-receipt of the taxable value of Rs.80.00 Lakhs in the impugned order. Prima facie, we do not find any contradictory evidence placed by applicants before us. However, at this stage, the claim of the applicant on exclusion of value of services relating to drawing and designing charges received before 1/6/2007 and service tax levied on such services after that date carries some weight. Also, we take note of the fact that the applicant has paid an amount of Rs.3.3 Lakhs during the course of adjudication proceeding - Conditional stay granted.

Summary

Issues:
Waiver of pre-deposit of Service Tax and penalty under provisions of Finance Act, 1994.

Analysis:
The appellant sought waiver of pre-deposit of Service Tax of Rs.50,16,133/- and penalty of Rs.1,04,19,666/- under the Finance Act, 1994. The demand was confirmed for providing taxable services like commission, brokerage, and consultancy charges for the period 2005-06 to 2007-08. The appellant argued that certain amounts received were wrongly included in the taxable value, such as Rs.1.8 crores against surrender of tenancy rights, Rs.80.00 Lakhs, drawing and designing charges, and trading activities of goods amounting to Rs.6.00 Lakhs. The appellant claimed financial hardship due to lack of client orders. The Revenue contended that the demand was correctly confirmed based on evidence and documents. The Adjudicating Authority's detailed findings supported the demand. The Revenue highlighted discrepancies in the inclusion of amounts under specific heads like brokerage and commission income. The Revenue accepted the error in levying Service Tax on drawing and designing charges before 01.6.2007, suggesting it could have been categorized differently.

Upon hearing both sides and examining the records, the Tribunal observed that the appellant failed to provide evidence to support the exclusion of certain amounts from the taxable value. While the Revenue's findings were upheld, the Tribunal acknowledged the appellant's argument regarding the drawing and designing charges. Considering the partial payment of Rs.3.3 Lakhs during adjudication and the appellant's financial hardship plea, the Tribunal directed the appellant to deposit Rs.10.00 Lakhs within eight weeks. Upon this deposit, the remaining dues would be waived, and recovery stayed during the appeal process. Failure to comply would lead to dismissal of the appeal without further notice. This decision was made in line with principles of law and the interests of both the appellant and the Revenue, as well as the precedents set by higher courts in stay applications.