2016 (7) TMI 781 - AT - Service Tax

Waiver of pre-deposit - it was submitted that inspite of promptly making the payment the First Appellate Authority had continued to upheld the penalties imposed upon the Appellant. - Held that - It is observed that the Appellant paid service tax amount demanded only after the show cause notice was issued. At the same time the service tax demand was recovered from the service recipients as argued by the Ld.A.R. The Appellant has not been able to make out the prima facie case for complete waiver of the confirmed dues/penalties and is accordingly required to be put to certain conditions. - stay granted partly.

Issues:
1. Delay in filing the appeal due to the sickness of the proprietor.
2. Stay of confirmed dues/penalties.
3. Recovery of service tax from service recipients.
4. Prima facie case for complete waiver of confirmed dues/penalties.
5. Pre-deposit amount and conditions for stay on recovery.

Issue 1: Delay in filing the appeal due to the sickness of the proprietor.
The appellant filed a Stay Application and Early Hearing Application concerning Order-in-Appeal No.529/Pat/S.Tax/Appeal/2013, citing a delay of less than one month due to the proprietor's sickness. The delay was explained to be a result of Hepatitis, and the reasons were accepted, leading to the condonation of the delay in filing the appeal.

Issue 2: Stay of confirmed dues/penalties.
The appellant argued that despite promptly depositing the amount demanded after being asked to do so, the First Appellate Authority upheld the penalties imposed. The Revenue argued that a Show-Cause Notice was issued for the period of demand from 2007-08 to 2010-2011, stating that the appellant had recovered the service tax from the service recipients, leading to penalties being imposed. After hearing both sides and reviewing the case records, it was observed that the appellant paid the service tax only after the show cause notice was issued and that the demand was recovered from the service recipients. As a result, the appellant failed to establish a prima facie case for a complete waiver of the confirmed dues/penalties.

Issue 3: Recovery of service tax from service recipients.
The appellant was found to have recovered the service tax from the service recipients, which was a key argument in the case regarding the imposition of penalties. This aspect played a significant role in the decision regarding the stay of confirmed dues/penalties.

Issue 4: Prima facie case for complete waiver of confirmed dues/penalties.
The appellant was unable to establish a strong case for the complete waiver of the confirmed dues/penalties. The tribunal found that the appellant's actions, including the delayed payment of service tax and the recovery from service recipients, did not support a complete waiver of the penalties imposed.

Issue 5: Pre-deposit amount and conditions for stay on recovery.
The tribunal ordered the appellant to pre-deposit an amount of ?10,000 within eight weeks and report compliance by a specified date. Upon making this pre-deposit, there would be a stay on the recovery of the remaining amount until the appeal's disposal. Failure to make the pre-deposit would result in the dismissal of the appeal without further notice to the appellant.

This detailed analysis of the judgment highlights the key issues addressed by the tribunal and the decisions made in relation to each issue.

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