2014 (8) TMI 739 - AT - Service Tax

Waiver of pre-deposit - mining services, cargo handling services and supply of tangible goods services - Held that - it transpires that major part of demand of Service Tax liability on the appellant is under the category of mining services. In our view, the stand taken by the appellant as to that they had a bonafide belief for non-discharge of Service Tax liability on the activity of mining services, is a mixed question of facts and law, which needs to be addressed in depth by appreciating the findings recorded by the adjudicating authority and the rebuttal given in the grounds of appeal. On a holistic view of the issue, we find that, prima facie, the bonafide belief of the appellant needs to be held as inappropriate in as much as when the Service Tax liability was on the mining services was introduced, they could have got clarification from the authorities. - Partial stay granted.

Summary

Issues:
1. Stay petition for waiver of pre-deposit of Service Tax liability, interest, and penalties.
2. Confirmation of Service Tax liability under mining services, cargo handling services, and supply of tangible goods services.
3. Claim of bonafide belief for non-discharge of Service Tax liability on mining services.
4. Argument regarding ignorance of law and intentional evasion of tax.
5. Financial difficulty claimed by the appellant.

Analysis:
The appellant filed a Stay Petition seeking a waiver of pre-deposit of a substantial amount confirmed by the adjudicating authority as Service Tax liability for mining services, cargo handling services, and supply of tangible goods services. The appellant argued that the demand was partly related to cargo handling and supply of tangible goods services, emphasizing that the activities formed a composite contract for mining and transportation, and that no effective possession was handed over for the supply of tangible goods services. The appellant also highlighted correspondence with authorities and reliance on a circular to support their position on the mining services liability period and ignorance of law. The Departmental Representative countered, emphasizing the lack of submissions on merits and the appellant's duty to seek clarification on the law.

Upon considering the submissions, the Tribunal noted that the major part of the Service Tax liability was related to mining services. The Tribunal found the appellant's bonafide belief argument regarding non-discharge of Service Tax liability on mining services to be a mixed question of facts and law. While acknowledging the arguable nature of the issue and the appellant's financial difficulty, the Tribunal directed the appellant to deposit a specified amount within a timeframe, subject to compliance. The Tribunal highlighted the need for detailed hearing on the bonafide belief and ignorance arguments at the final disposal of the appeal.

In conclusion, the Tribunal allowed the application for waiver of pre-deposit of the balance amounts involved, staying recovery until the appeal's disposal. The decision aimed to address the complex issues raised by the appellant regarding the Service Tax liability under different categories, the bonafide belief argument, and the financial constraints faced by the appellant, while ensuring compliance with the specified deposit amount.