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Issues involved: Stay order modification requiring pre-deposit, consideration of limitation and financial hardship aspects.
Stay Order Modification: The applicant was required to make a pre-deposit of Rs. 12 lakhs within 8 weeks, failing which the appeal would stand dismissed. The applicant contended that limitation and financial hardship aspects were not considered, citing weak financial condition due to losses suffered by the firm. The authorities found that vital information regarding charges was not provided until requested, indicating deliberate evasion. The extended period was deemed justified, and the Supreme Court precedent cited by the applicant was deemed inapplicable due to differences in knowledge between cases. Financial Condition of Applicant: Despite the firm showing losses, the balance sheet revealed significant partner capital and assets, indicating the ability to make the required pre-deposit. The firm's financial stability was further supported by fixed assets, current assets, loans, income tax provisions, and interest to partners. Overall, the contention of financial crisis due to the pre-deposit was deemed unsubstantiated. Amount Payable and Pre-Deposit: The applicant was required to pay Rs. 49,04,116 as service tax and penalty, with a pre-deposit of Rs. 12 lakhs representing only 12% of the total amount due. The Tribunal found no justification for modifying the stay order based on the grounds presented. The applicant was granted four weeks to make the pre-deposit, with dismissal of the appeal as the consequence of non-compliance. Disposition: The application was disposed of accordingly, with a compliance deadline set for a future date.
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