2015 (12) TMI 14 - AT - Service Tax

Waiver of pre deposit - Adjudicating authority has not taken into account the excludible value of non-taxable service - Penalty u/s 77 & 78 - Held that - In the adjudication order at para 28.2, where the Commissioner has already taken into account the total value and also worked out the revised value. The total taxable value worked out to ₹ 2,30,30,794/- and it is revised to ₹ 1,64,06,953/- after excluding the amount of ₹ 66,23,841/- already paid as per the R.O s verification report. We find from the grounds of appeal appellants have paid an amount of ₹ 78,10,816/- for the period 2009-10, 2010-11 and 2011-12 as per ST-3 returns and challans. Taking into consideration the submissions, we find that appellants have not made out a prima facie case for waiver of predeposit of entire demand. Appellant s contention of they being a sub-contractor, tax liability should be fastened on the main contractor will be examined at the time of final hearing of appeal. - Partial stay granted.

Summary

Issues:
1. Confirmation of demand of service tax with interest and penalties
2. Consideration of previous show cause notice and payments made
3. Exclusion of certain amounts from adjudication
4. Argument regarding tax liability as a sub-contractor

Analysis:
1. The appellant filed an appeal against an order confirming a demand of service tax, interest, and penalties imposed by the Commissioner of Central Excise. The adjudicating authority confirmed a demand of Rs. 1,64,06,953/- along with penalties under Section 78 and Section 77, and ordered payment under Section 70 of the Finance Act.

2. The appellant's advocate argued that a previous show cause notice had been issued for a different period, and they had already paid a significant amount of Rs. 66,23,841/-. The current show cause notice covered a different period, and the department had not classified the demand under specific categories. The advocate also highlighted that an additional amount of Rs. 11,86,975/- paid as per ST-3 returns was not considered by the adjudicating authority.

3. The department's representative contended that the appellant failed to provide details of the services rendered despite the department's request. However, upon examining the adjudication order, it was found that the total taxable value was revised to Rs. 1,64,06,953/- after excluding the amount already paid. The Tribunal noted that the appellant had paid Rs. 78,10,816/- for certain periods as per returns and challans.

4. The Tribunal concluded that the appellant did not establish a prima facie case for the waiver of the entire demand. The argument regarding the appellant being a sub-contractor and the tax liability should be on the main contractor was deferred for the final hearing. The Tribunal directed the appellant to predeposit Rs. 16,00,000/- within 8 weeks, with the previously claimed amount of Rs. 11,86,975/- to be adjusted subject to verification. Upon such deposit, the predeposit of the balance demand, interest, and penalty would be waived, and recovery stayed during the appeal's pendency. Compliance was to be reported by a specified date.