2008 (9) TMI 239 - AT - Service Tax

Rent a cab operator - impugned order passed in revision has modified the original order which had dropped the proposal to demand service tax - appellants submits that waiver of pre-deposit and stay were granted by the Tribunal vide Stay Order, in order to hear the appeals filed by the same appellants against the same demand affirmed by the Commissioner (A) - Commissioner had revised an order which had already merged with the order of the Commissioner (A)- impugned order were found to be prima facie not sustainable in the order of the Tribunal stay granted

Summary

Issues:
1. Application for waiver of pre-deposit and stay of recovery of demand of service tax.
2. Liability of partners of a partnership firm for service tax dues.
3. Validity of the impugned order passed by the Commissioner.
4. Prima facie sustainability of the demands raised against the appellants.

Analysis:
1. The appellants filed applications seeking waiver of pre-deposit and stay of recovery of demand of service tax. The original authority found that three partners of a partnership firm had to discharge the liability of service tax due from the firm under the category of 'rent a cab operator' for the periods 2000-01 to 2003-04. The impugned order affirmed the demand against the firm but ordered the liability to be shared among the partners. The revisional order modified the original order, which had dropped the proposal to demand service tax from the firm on the grounds of cessation of existence.

2. The counsel for the appellants argued that waiver of pre-deposit and stay had been granted by the Tribunal previously to hear appeals against the same demand affirmed by the Commissioner. The counsel contended that the impugned order was not validly passed due to the merger of the orders. The Commissioner had revised an order that had already merged with the order of the Commissioner (A), raising concerns about the validity of the impugned order.

3. The Senior Departmental Representative (SDR) submitted that the impugned order adequately addressed the arguments put forth by the appellants. However, the Tribunal, after careful consideration of the case facts, found that the impugned demands were prima facie not sustainable based on a previous order. Consequently, the Tribunal granted waiver of pre-deposit and stay of recovery of demands until the final disposal of the appeals, indicating a favorable decision for the appellants.

4. The judgment highlights the importance of considering the sustainability of demands raised against appellants and the necessity of providing a fair opportunity for appeal by granting waivers and stays. The decision reflects the Tribunal's role in ensuring justice and fairness in tax matters, particularly concerning the liability of partners in a partnership firm for service tax dues.