2016 (2) TMI 332 - AT - Service Tax

Waiver of pre-deposit - Demand of service beyond the scope of show cause notice - though initially it was demanded in the SCN under the category of Mining services , but in the adjudication order, the said demand was confirmed under Business Auxiliary Service and GTA services. - Held that - At this stage, it is difficult to accept the contention of the Revenue that discharge of service tax liability for the services rendered mostly in Orissa and partly in Jharkhand at Bhubaneswar, Odisha cannot be accepted as payment towards their liability and the applicant is required to discharge service tax again. Therefore, on this account, the applicant could able to make out a prima facie case for total waiver of pre-deposit. Since the appellant had submitted their reply explaining their stand on the applicability of BAS & GTA service to their case, prima facie, it cannot be said that the Order is de hors the record of the case. - Stay granted partly.

Summary

Issues: Application for waiver of pre-deposit of Service Tax and penalty; Disputed demand for service tax; Scope of show cause notice; Prima facie case for waiver; Applicability of Business Auxiliary Service and GTA services.

In this case, the applicant sought a waiver of pre-deposit of Service Tax amounting to Rs. 78.83 Lakhs and an equal penalty imposed under Section 78, along with penalties under other provisions of the Finance Act, 1994. The advocate for the applicant argued that a significant portion of the demand related to service tax payments made during 2007-08 to 2009-10 for services under "Mining, Mineral oil or gas services" in Odisha, which were not considered when the business shifted to Jharkhand in 2010-2011. The advocate contended that the revenue's stance was incorrect. Additionally, the advocate challenged the balance amount of Rs. 15.00 Lakhs, highlighting that the demand was initially categorized as "Mining services" but confirmed under 'Business Auxiliary Service' and GTA services in the adjudication order, which was beyond the scope of the show cause notice and thus invalid.

The Revenue representative acknowledged that the Rs. 63.00 Lakhs had been paid during the relevant period to the Commissioner of Service Tax in Bhubaneswar. However, they argued that since part of the services were rendered in Jharkhand, duty was also required to be discharged there. Regarding the liability towards 'Business Auxiliary Service' and GTA Services, it was argued that the adjudicating authority did not overstep its bounds, as the applicant's claims for benefits and applicability under specific notifications were not accepted, leading to the confirmed demand.

The Tribunal found that the applicant had already paid service tax for services rendered in Odisha and Jharkhand during 2007-08 to 2009-10, and after moving to Jharkhand in 2010-11, they discharged service tax for services there as well. The Tribunal was not convinced by the Revenue's argument that the tax paid in Odisha could not be considered towards their liability in Jharkhand. Therefore, a prima facie case for total waiver of pre-deposit was established. The Tribunal also noted that the order did not deviate from the case record, and the applicability of 'Business Auxiliary Service' and GTA services would be further examined during the appeal proceedings based on evidence. Consequently, the applicant was directed to deposit Rs. 1.00 Lakh within eight weeks, with the remaining dues waived and recovery stayed during the appeal process.