2015 (12) TMI 677 - AT - Service Tax

Waiver of pre deposit - Cargo handling service - Held that - Appellant should at least deposit the collected amount. The Hon ble Rajasthan High Court s decision 2015 (6) TMI 110 - RAJASTHAN HIGH COURT referred to by the learned advocate does not declare the law that in all the stay petitions filed prior to 06/08/2014, the direction to deposit should be limited to 10% of the confirmed demand of tax. The Hon ble High Court only took note of the amended provisions and in that particular case reduced the amount of deposit to 10%. However there is no law declared by the Hon ble High Court that in the stay petitions filed prior to 06/08/2014, the amount of deposit should be limited to 10%. Otherwise also, the said decision would not be applicable to the facts of the present case, inasmuch as the appellant had already collected the tax from the customers, and we are of the prima facie view that appellant should deposit ₹ 1.05 crores along with proportionate interest with the Revenue - Partial stay granted.

Summary

Issues:
1. Confirmation of service tax liability under cargo handling service category.
2. Appellant's argument regarding different activities not to be clubbed together.
3. Assailing the demand of duty on the point of limitation.
4. Revenue's submission on non-deposit of collected service tax amount.
5. Direction to deposit the collected amount as a condition of hearing the appeal.

Analysis:
1. The judgment confirms the service tax liability of the appellant amounting to Rs. 1,41,45,378 under the cargo handling service category for the period April 2009 to June 2011. The appellant provided loading, unloading, transportation, and stacking services to M/s. Kudremukh Iron Ore Company Ltd. without paying service tax on these activities during the said period. The appellant argued that the two activities should not be clubbed together to fix liability under cargo handling service.

2. The appellant contended that the loading and unloading activities, along with transportation, were distinct and should not be considered a single service for tax purposes. The appellant also raised the issue of limitation regarding the demand of duty. The appellant referenced a decision of the Hon'ble Rajasthan High Court in a different case to support their arguments.

3. The Revenue highlighted that the appellant had collected the service tax amount from M/s. Kudremukh Iron Ore Company Ltd. but failed to deposit it with the Revenue. The Revenue suggested that the appellant should be directed to deposit the collected amount as a condition for the appeal hearing. The appellant acknowledged that they had collected the amounts from their customers.

4. The Tribunal, without delving into the merits of the case, emphasized the necessity for the appellant to deposit the collected amount. The Tribunal clarified that the decision of the Hon'ble Rajasthan High Court referenced by the appellant did not mandate a 10% deposit in all cases and was not directly applicable to the present situation. Considering that the appellant had already collected the tax from customers, the Tribunal directed the appellant to deposit Rs. 1.05 crores along with interest within twelve weeks as a condition for hearing the appeal.

5. The judgment concludes by stating that subject to the deposit of the specified amount, the pre-deposit of the remaining balance would be waived, and recovery thereof stayed. The appellant was instructed to report compliance by a specified date.