2015 (2) TMI 841 - AT - Service Tax

Waiver of pre deposit - Transportation of Goods by Road Service - Held that - Applicant had not produced the Reconciliation Statement before the Adjudicating Authority. We find some force in the submission of the learned Advocate and the difference will be ascertained after verification of accounts in depth which was not done. It shall be looked into at the time of appeal hearing. In view of that, the applicant failed to make out a strong prima facie case for waiver of pre-deposit of the entire amount of tax along with interest and penalty. The learned Advocate submits that the matter should be remanded as the Adjudicating authority had not considered the Reconciliation Statement of Accounts, which will be evident from the CD. Therefore, we direct the applicant to pre-deposit a sum of ₹ 50,00,000 within a period of eight weeks. Upon deposit of the said amount, pre-deposit of balance amount of tax along with interest and penalty would be waived. Both sides are at liberty to mention at the time of stay compliance for disposal of the appeal - Partial stay granted.

Summary

Issues: Application for waiver of pre-deposit of service tax under "Transportation of Goods by Road Service" for the period Apr. '07 to Oct. '11.

Analysis:
1. The applicant sought waiver of pre-deposit of service tax amounting to Rs. 5,63,99,000/- along with interest and penalty for the specified period. The demand was raised based on the Trial Balance produced during the audit. The Adjudicating authority noted discrepancies in the General Ledger Accounts, indicating a cumulative effect of Rs. 45.24 crores, as opposed to the Rs. 282.21 crores sought to be deducted. The applicant failed to provide a Reconciliation Statement based on audited Final Accounts, leading to reliance on the figures from the Trial Balance by the Adjudicating authority.

2. The applicant contested the findings, highlighting the difference between Trial Balance and Profit and Loss Account, asserting that they cannot match due to the nature of the summaries. They requested verification of transactions through a CD to ensure accurate calculations. A Chartered Accountant Certificate was submitted as additional evidence to support their claim of no difference between Trial Balance and Profit and Loss Account.

3. The Tribunal acknowledged the absence of a Reconciliation Statement before the Adjudicating Authority and the need for a detailed verification of accounts to ascertain the discrepancies. While finding merit in the applicant's submissions, the Tribunal directed a pre-deposit of Rs. 50,00,000/- within eight weeks, pending which the balance tax amount along with interest and penalty would be waived. The Tribunal emphasized the importance of considering the Reconciliation Statement during appeal hearings, allowing both parties to address the stay compliance for appeal disposal.

4. Ultimately, the Tribunal's decision to require a partial pre-deposit was based on the lack of a strong prima facie case for waiving the entire tax amount. The directive for pre-deposit aimed to facilitate a more thorough examination of the discrepancies in accounts, ensuring a fair and informed decision during the appeal process. The Tribunal's order balanced the interests of both parties by providing an opportunity for further verification while allowing for the waiver of the remaining tax liability upon compliance with the pre-deposit requirement.