2008 (5) TMI 192 - AT - Service Tax

Adjudicating Authority observed that the Applicants were providing Cargo Handling Service and their works include (i) Shifting of packed cement bags from the packing plant to storage yards (ii) Shifting of steam coal from power plant to coal plant (iii) Loading of packed cement bags - contention of the learned Counsel that they were supplying labour for such activities as evident from contract between the parties, would be looked into at the time of appeal hearing stay not granted completely

Summary

Issues: Application for waiver of pre-deposit of tax and penalties for providing Cargo Handling Service.

In the judgment by the Appellate Tribunal CESTAT NEW DELHI, the Applicants filed an Application seeking waiver of pre-deposit of tax amounting to Rs. 4,39,346/- along with penalties. The Adjudicating Authority noted that the Applicants were engaged in providing Cargo Handling Service, involving activities such as shifting of cement bags, coal, and loading of cement bags. The Applicants contended that they were merely supplying labor for these activities, citing relevant Tribunal decisions. The Tribunal agreed to examine this contention during the appeal hearing and directed the Applicants to deposit an additional amount of Rs. one lakh within six weeks, considering the sum of Rs. 52,483/- already deposited. Upon compliance with this directive, the pre-deposit of the remaining tax amount and penalties was waived until the Appeal's disposal, with a reporting deadline set for June 30, 2008. The order was dictated and pronounced in the open Court by Member (J) P.K. Das.

This judgment primarily addresses the issue of waiver of pre-deposit of tax and penalties concerning the provision of Cargo Handling Service by the Applicants. The Tribunal considered the nature of the services provided, focusing on the contention that the Applicants were merely supplying labor for the specified activities, as evidenced by the contract between the parties. The Applicants relied on Tribunal decisions to support their argument, emphasizing the cases of S.N. Uppar & Co. v. CCE, Belgaum and Sainik Mining & Allied Services Ltd. v. CCE&ST, BBSR. The Tribunal acknowledged the need to examine this aspect further during the appeal hearing, indicating a willingness to consider the contractual arrangements and the actual nature of the services rendered by the Applicants.

Furthermore, the judgment delves into the procedural aspect of the case, specifically addressing the pre-deposit requirement. The Tribunal took into account the amount already deposited by the Applicants, which stood at Rs. 52,483/-, and directed them to submit an additional sum of Rs. one lakh within a specified timeframe of six weeks. Upon compliance with this directive, the Tribunal decided to waive the pre-deposit of the remaining tax amount and penalties until the final disposal of the Appeal. This decision reflects a balanced approach by the Tribunal, ensuring that the Applicants fulfill their financial obligations while also granting relief by waiving the pre-deposit requirement, subject to the specified conditions and reporting deadline of June 30, 2008, set for monitoring compliance with the directive.