2008 (7) TMI 145 - AT - Service Tax

Tour Operator Service provided for the period 1-4-2000 to 30-4-2001 - SCN issued in September 2005 for the impugned period after the jurisdictional Superintendent had addressed the same assessee to pay up the tax, is clearly time-barred moreover, revenue has not appealed against the decision in similar matter in which Commissioner (Appeals) vacated demand for the same period on the ground of time bar in view of this stay is granted

Issues:
1. Waiver of pre-deposit and stay of recovery of service tax and penalty.
2. Validity of Show Cause Notice issued in September 2005.
3. Time-barred nature of the proceedings.
4. Constitutional validity of the impost in question.
5. Prima facie case against the demands.

Analysis:

1. Waiver of pre-deposit and stay of recovery:
The appellants sought waiver of pre-deposit and stay of recovery of service tax and penalty imposed on them for non-payment of service tax under the category of "Tour Operator Service" for the period 1-4-2000 to 30-4-2001. The Commissioner confirmed the demands proposed in the Show Cause Notice dated September 2005. The appellants argued that the Show Cause Notice was time-barred as it was issued after the jurisdictional Superintendent had already directed them to pay the tax. The Tribunal found that the Show Cause Notice issued in 2005 was indeed time-barred, and the department did not contest the fact that another assessee's demand for the same period was vacated on the ground of time bar. Consequently, the Tribunal granted full waiver of pre-deposit and stay of recovery during the appeal process.

2. Validity of Show Cause Notice issued in September 2005:
The appellants contended that the Show Cause Notice issued in September 2005 was barred by limitation since they had been directed to pay the service tax earlier. The Tribunal agreed with this argument, noting that the Notice was indeed time-barred, strengthening the appellants' case. The department did not challenge the fact that similar demands against another assessee for the same period were vacated on the grounds of time bar. This non-contestation further supported the appellants' position.

3. Time-barred nature of the proceedings:
The Tribunal analyzed the timeline of events, highlighting that the jurisdictional Superintendent had instructed the appellants to pay the service tax as early as 5th September 2001. The Show Cause Notice issued in 2005, after this directive, was deemed time-barred. The Tribunal noted that the department did not dispute the fact that the Commissioner (Appeals) had vacated a similar demand for another assessee for the same period due to being time-barred. This lack of challenge further supported the appellants' contention that the proceedings were time-barred.

4. Constitutional validity of the impost in question:
Although the appellants had challenged the constitutional validity of the tax imposition in question, the focus of the Tribunal's decision was primarily on the procedural aspects, such as the time-barred nature of the Show Cause Notice. The Tribunal did not delve deeply into the constitutional validity issue as the primary consideration was the validity of the proceedings and demands made against the appellants.

5. Prima facie case against the demands:
Based on the arguments presented by both parties and the facts of the case, the Tribunal found that the appellants had made out a prima facie case against the demands made by the department. Considering the time-barred nature of the proceedings and the lack of challenge to similar demands being vacated for another assessee, the Tribunal granted full waiver of pre-deposit and stay of recovery during the appeal process, supporting the appellants' position.

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