2015 (1) TMI 281 - AT - Service Tax

Waiver of pre deposit - Rent-a-cab service - Utilization of service in SEZ - Held that - services were used within SEZ and therefore the procedure followed by the appellant in providing the service without payment of service tax is not correct. This is because the exemption to SEZ units for the services utilized is by way of refund and therefore initially tax has to be paid. Bulk of the demand is for the extended period and the amount within the normal period could not be ascertained. On going through the records, we found for the year 2010-2011, the amount involved is about ₹ 6,15,000/- and having regard to the facts and circumstances and in view of the fact that the exemption is available but by way of refund, extended period may not be invocable. Therefore, in our opinion, if the appellant deposits the amount payable for the normal period that would be sufficient - Partial stay granted.

Summary

Issues: Condonation of delay in filing appeal, Service tax on rent-a-cab service to SEZ units, Exemption for SEZ units, Pre-deposit amount determination, Stay against recovery

Condonation of Delay in Filing Appeal:
The appellant sought condonation of a 6-day delay in filing the appeal, attributing it to the proprietor's illness. The Tribunal, satisfied with the reason provided, granted the condonation.

Service Tax on Rent-a-Cab Service to SEZ Units:
The appellant provided rent-a-cab services to SEZ units for use within the SEZ. The Tribunal noted that the procedure followed by the appellant in providing the service without payment of service tax was incorrect. It clarified that the exemption for services utilized by SEZ units is in the form of a refund, necessitating the initial payment of tax. The Tribunal found that for the year 2010-2011, an amount of approximately Rs. 6,15,000 was involved. Considering the exemption available but by way of refund, it opined that if the appellant deposits the amount payable for the normal period, it would be sufficient.

Exemption for SEZ Units:
The Tribunal emphasized that the exemption for SEZ units is through refund, requiring the initial payment of tax. It highlighted that the bulk of the demand was for the extended period, and the amount within the normal period could not be precisely determined. However, for the year 2010-2011, an amount of around Rs. 6,15,000 was identified. The Tribunal directed the appellant to deposit Rs. 5,00,000 towards pre-deposit within eight weeks and report compliance by a specified date.

Pre-deposit Amount Determination:
Considering the facts and circumstances, the Tribunal directed the appellant to deposit Rs. 5,00,000 as a pre-deposit amount within a specified timeframe. It noted that the appellant had already paid Rs. 2 lakhs. Upon compliance with this requirement, the Tribunal waived the balance dues and granted a stay against recovery.

Stay Against Recovery:
Subject to the appellant's compliance with the pre-deposit requirement, the Tribunal waived the balance dues and granted a stay against recovery. The operative portion of the order was pronounced in open court, ensuring clarity and immediate effect.