2015 (7) TMI 715 - AT - Service Tax

Waiver of pre deposit - Works Contract service - utilization of CENVAT Credit - Held that - Commissioner has confirmed the demand on the ground that the appellant could not place before him necessary evidence to establish that the accepted tax liability has been discharged. The appellant, on the other hand, before this forum for the first time, produced certain documents/evidences including payment by utilizing CENVAT Credit, in support of their claim of discharge of the entire service tax liability. Both sides agree that the documents need to be verified to ascertain the payment of admitted service tax liability. At this stage, taking note of the concern of the Revenue that the appellant be put into terms in remanding the case, we direct the appellant to deposit ₹ 1.5 Crores within eight weeks - Matter remanded back - Decided conditionally in favour of assessee.

Summary

Issues Involved:
Waiver of pre-deposit of Service Tax and penalty based on the acceptance of Service Tax liability for Works Contract service without proof of payment.

Analysis:

The judgment revolves around the issue of waiver of pre-deposit of Service Tax and penalty amounting to Rs. 21.19 Crores, where the applicant, a public sector undertaking, accepted the Service Tax liability for Works Contract services from June 1, 2007, to September 30, 2010. The Ld. Commissioner confirmed the demand due to the absence of proof of payment of the accepted Service Tax amount. The applicant, during the Tribunal proceedings, presented documents supporting the claim of payment, including utilization of CENVAT Credit, which were not initially submitted to the Ld. Commissioner. The Ld. A.R. for the Revenue contested the claim, stating that verification was necessary and argued against remanding the case. However, both sides consented to dispose of the appeal at the Tribunal stage.

The Tribunal focused on determining whether the appellant had discharged the accepted Service Tax liability of Rs. 37,95,14,961, which was undisputed. The Ld. Commissioner's confirmation of the demand was based on the appellant's failure to provide evidence of payment. The appellant, for the first time before the Tribunal, submitted documents and evidence, including CENVAT Credit utilization, to support their claim of discharging the entire Service Tax liability. Both parties agreed on the need for verification of these documents to establish payment. In light of the Revenue's concerns, the Tribunal directed the appellant to deposit Rs. 1.5 Crores within eight weeks and report compliance to the Ld. Commissioner. The Ld. Commissioner would then proceed with the case, considering all evidence presented, and granting a reasonable opportunity of hearing to the appellant. The judgment allowed the appeal by remanding the case for further proceedings, keeping all issues open for consideration.