2014 (8) TMI 621 - AT - Service Tax

Waiver of pre deposit of service tax - Authorized Service Station - Held that - Tribunal in the case of Mackintosh Burn Ltd. v. CCE, Kolkata reported in 2010 (5) TMI 435 - CESTAT, KOLKATA and in the case of Shakti Motors v. CCE, Ahmedabad reported in 2008 (7) TMI 85 - CESTAT AHMEDABAD has observed that the entire consideration would be treated as service tax. We also find favour in the appellant s contention as regards invocation of longer period. Admittedly, there is no positive act on the part of the appellant to suppress or mis-statement of any facts with intention to evade payment of duty. The issue involved is of bona fide dispute on the interpretation of provisions of Section 67(2) of Finance Act, 1994 and cannot reflect upon the mala fide on the part of the appellant. As such, we are of the view that appellants have been able to make out a good case in their favour so as to allow stay petition unconditionally - Stay granted.

Summary

Issues:
1. Dispensing with the condition of pre-deposit of service tax and penalty imposed under Sections 78 and 76 of Finance Act, 1994.

Analysis:
The appellants, registered as service providers under the category of "Authorized Service Station," had treated the entire consideration amount as cum-tax during the period 2003-04 to 2006-07, deducting the tax amount from the gross amount to arrive at the assessable value. Subsequently, proceedings were initiated against them for invoking a longer period of limitation. The lower authorities rejected the appellant's contention, stating that without an invoice proving the gross amount was inclusive of service tax, it cannot be considered as cum-tax price. The appellate authority observed that the suppression of taxable value detected by audit and the appellant not declaring the entire consideration as cum-duty justified the extended period invocation.

Upon considering precedents like Mackintosh Burn Ltd. v. CCE, Kolkata and Shakti Motors v. CCE, Ahmedabad, the Tribunal found merit in the appellant's argument that the entire consideration should be treated as service tax. The Tribunal also noted that there was no positive act by the appellant to suppress facts with the intention to evade duty. The issue primarily revolved around a bona fide dispute regarding the interpretation of Section 67(2) of the Finance Act, 1994, rather than any malicious intent on the appellant's part. Consequently, the Tribunal concluded that the appellants had presented a strong case, warranting the unconditional allowance of the stay petition.

The judgment was pronounced on 6-1-2012 by Ms. Archana Wadhwa, Member (J), and Shri Rakesh Kumar, Member (T) of the Appellate Tribunal CESTAT NEW DELHI.