2014 (7) TMI 827 - HC - Service Tax

Waiver of pre deposit of ₹ 6,50,00,000 - booking commission, service commission and warranty services - Availment of CENVAT Credit - Held that - Though the adjudicating authority has raised the demand against the said services, the Tribunal has rightly not analysed in detail the provisions related to such services, leaving it to be decided at the time of substantive adjudication. The question raised is that of interpretation of statutory provisions. Therefore, any observation either way by the Tribunal or by this court may prejudice the parties to the lis. Therefore, a detailed examination on the question of interpretation of statutes not be commented upon at the stage of waiver of pre-deposit. The appellant has already been granted complete waiver of annual maintenance charges and 50 per cent. of the duty demanded against booking commission, service commission and warranty services. The discretion exercised by the Tribunal cannot be said to be unjust or irrational which may give rise to any substantial question of law. We may notice that the appellant has not setup a case of financial hardship - appellant is permitted to deposit the said amount within a period of six weeks. - Further relief in stay denied.

Summary

Issues:
1. Justification of the Tribunal's order for pre-deposit of Rs. 6,50,00,000.
2. Whether the Tribunal's order is erroneous and unsustainable in law and facts.

Analysis:
1. The appellant challenged the Tribunal's order directing a deposit of Rs. 6,50,00,000, constituting approximately 50% of the levy attributable to booking commission, service commission, and warranty services. The appellant contended that the amount paid for these services is part of input services, entitling them to input credits. The Tribunal did not delve into the detailed provisions related to these services, leaving it for substantive adjudication. The issue of whether these services qualify as input services is a matter of statutory interpretation. The Tribunal's discretion in granting a complete waiver of annual maintenance charges and 50% of the duty demanded cannot be deemed unjust or irrational. The Tribunal found the appellant's claim for input services to be debatable, not patently untenable, or without jurisdiction. Thus, the court held that no substantial question of law arose for consideration, permitting the appellant to deposit the amount within six weeks and move for an early appeal hearing.

2. The appellant raised several substantial questions of law regarding the Tribunal's order, questioning its justification, legality, and correctness. The court noted that the Tribunal's decision was based on the debatable issue of whether the services in question qualified as input services. The court found no grounds to entertain the appeal, as the Tribunal's exercise of discretion was not deemed unjust or irrational. The appellant's failure to demonstrate financial hardship further weakened their case. Therefore, the court disposed of the appeal, allowing the appellant to deposit the required amount within the specified time frame and seek an early hearing before the Tribunal for further adjudication.