2008 (4) TMI 132 - AT - Service Tax

Cable operator - applicant disclosed the payments made in their income-tax return. But there is no material that the Revenue had any knowledge of the payment made - suppression of facts - applicant failed to make out a prima facie case for waiver of pre-deposit of entire amount of tax and penalty - applicant to pre-deposit the amount of Rs. 40,000/- - stay is granted partly

Summary

Issues:
1. Whether the demand of tax by show cause notice is barred by limitation.
2. Whether the applicant's disclosure of payments in their income-tax return is sufficient to warrant waiver of pre-deposit.
3. Whether the Revenue had prior knowledge of the payments made by the applicant.
4. Determination of the pre-deposit amount and waiver of the balance amount of tax and penalty till the appeal's disposal.

Analysis:
1. The advocate for the appellant argued that the demand of tax against the period from August 2002 to September 2004 is time-barred. He contended that the applicant, a small cable operator, registered in 2003, and filed an income-tax return in March 2005 based on which the tax demand was calculated. He asserted that there was no intention to evade tax. On the other hand, the Departmental Representative (DR) argued that the Revenue was aware of the tax payment, and the applicant did not disclose the income-tax return to the Revenue, indicating suppression of facts.

2. The Member (J) analyzed the submissions and observed that while the applicant disclosed the payments in their income-tax return, there was no evidence that the Revenue had prior knowledge of these payments. The Member noted that further details would be examined during the appeal hearing. Consequently, the Member found that the appellant failed to establish a prima facie case for the complete waiver of pre-deposit. Considering the overall circumstances, the Member directed the applicant to pre-deposit Rs. 40,000 towards tax within six weeks. Upon compliance with this directive, the pre-deposit of the remaining tax and penalty amount was waived until the appeal's disposal.

3. The judgment emphasized that the decision regarding pre-deposit and waiver was made in light of the facts and circumstances presented during the hearing. The Member's order, pronounced in the open court on 24-4-2008, outlined the specific pre-deposit amount and the conditions for waiver of the balance tax and penalty until the appeal's final resolution. The applicant was instructed to report compliance by 9-6-2008, ensuring adherence to the directives issued by the Tribunal.

This detailed analysis highlights the key arguments presented by both parties, the Tribunal's assessment of the case, and the specific directives issued regarding pre-deposit and waiver of tax and penalty amounts pending the appeal's outcome.