2008 (4) TMI 123 - AT - Service Tax

Authorized service station - allegation is that they have not paid service tax in respect of amounts collected and accounted as contract charges, in respect of paint and body job charges collected from the customers - appellants contend that Service Tax is not being required to be paid on the inputs as they have already paid Service Tax on the contract charges since assessee has pre-deposited an amount of Rs. 7,149,611 out of 10,18,922, stay is granted for balance amount

Summary

Issues:
1. Pre-deposit of balance duty and penalties confirmed in the matter.
2. Allegation of non-payment of service tax on paint and body job charges collected from customers during 2004-2005.
3. Challenge on the leviability of service tax based on working under a works contract.
4. Request for waiver of balance amount based on the pre-deposit made.
5. Decision on granting waiver and stay on recovery of balance duty amount and penalty.

Analysis:
1. The appellant was required to pre-deposit the balance of duty and penalties confirmed in the matter, with a confirmed duty amount of Rs. 10,18,922, out of which Rs. 7,49,611 had already been deposited. The case involved the non-payment of service tax on paint and body job charges collected from customers during 2004-2005, as the appellants were providers of authorized service station services under Section 65(8)(105)(zo) of the Finance Act. A show cause notice was issued on 30-1-2006.

2. The appellant challenged the leviability of service tax on the items indicated in the contract, arguing that they were working under a works contract and had already paid service tax. The appellant had already deposited a significant amount, and requested a waiver for the balance. The Revenue, represented by the learned SDR, contended that they had a strong case and the appellants should be directed to pre-deposit the balance amount.

3. After careful consideration, the tribunal noted the various pleas raised by both sides regarding service tax payment on inputs and contract charges. The tribunal observed that the appellant had pre-deposited a substantial amount. Considering this, the tribunal allowed the stay application, granting a waiver of pre-deposit for the balance duty amount and penalty, and stayed its recovery until the appeal's disposal. The tribunal cited relevant judgments of the Supreme Court, Tribunal, and High Court, specifying that there should be no recovery even after 180 days.

4. The decision was pronounced and dictated in open court, with the matter scheduled to come up for final hearing in due course. The tribunal's order provided relief to the appellant by granting a waiver of the balance amount and penalty, with a stay on recovery, based on the pre-deposit made and the arguments presented by both parties during the proceedings.