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2009 (1) TMI 69 - AT - Service TaxNon-compliance with order of pre-deposit - Business auxiliary service rendered outside India - recipient of any service provided abroad is liable to pay tax only during the period from 18.4.2006 onwards when S. 66A was introduced - appellant has already paid the tax due for the service received during this period - Demand of balance amount of tax & penalties not sustainable - appeal is allowed by way of remand to decide the appeal on merits without insisting on any pre-deposit u/s 35F
In the appellate tribunal CESTAT, Chennai case of 2009 (1) TMI 69, the order impugned dismissed the appeal filed by the appellants for not making a pre-deposit in accordance with Section 35F of the Central Excise Act, 1944, which was made applicable to service tax. The appellant, an exporter of fabrics, paid commission for services procured from customers abroad through agents based abroad. The original authority demanded service tax, interest, and penalties under various sections of the Finance Act, 1944. The appellants argued that they were only liable to pay service tax on services rendered outside India from 18.4.2006 onwards when Section 66A was introduced. The Commissioner (Appeals) dismissed the appeal due to non-compliance with the pre-deposit requirement.
The appellants moved an application for waiver of pre-deposit and stay of recovery, arguing that the service rendered abroad and received by the appellant was not subject to service tax prior to 18.4.2006. They had already deposited a portion of the tax demanded and penalties. The Jt. CDR did not oppose the remand request. The tribunal noted that the impugned service fell under the provisions of Section 66A and that the liability of the appellants for service tax was limited to the period from 18.4.2006 to 27.9.2006. As the appellant had already paid the service tax for this period, the appeal was allowed by way of remand to the lower appellate authority for a decision on merits without requiring any additional pre-deposit under Section 35F of the Central Excise Act. The appellant was to be given an effective hearing. The appeal was disposed of along with the stay application.
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