2008 (12) TMI 120 - AT - Service Tax

Rent a Cab Operator - original authority confirmed the demands of service tax as proposed and imposed penalties under Sections 75, 76, 77 and 78 and interest - SCN and OIO did not substantiate the allegation that the service had not been paid owing to fraud, collusion no finding given in adjudication orders on fraud, suppression etc. held that the appellants have made a prima facie case against the impugned demand and penalties stay granted

Summary

Issues:
1. Waiver of pre-deposit of service tax under the 'Rent a Cab Operator Scheme' demanded from the appellants.
2. Penalties imposed under various Sections of the Finance Act, 1994 on the appellants for contravening the provisions of the Act.

Analysis:
The appeals sought waiver of pre-deposit of service tax and penalties imposed on the appellants under the 'Rent a Cab Operator Scheme'. The appellants provided vehicles for transporting BSNL staff under an agreement. The original authority demanded service tax and imposed penalties under Sections 75, 76, 77, and 78 of the Act. The Commissioner (A) upheld the original authority's orders.

The appellants argued that the service provided did not fall under the 'Rent a Cab Operator Scheme' definition. They claimed ignorance of the tax requirement and alleged they were not provided correct invoices by BSNL regarding service tax liability. The appellants denied fraud, collusion, or wilful misstatement in non-payment of tax.

The JCDR contended that the notices alleged wilful misstatements and suppression of facts, justifying the orders passed. However, the Tribunal found that the orders lacked findings to substantiate evasion charges by fraud or wilful misstatement. The Tribunal noted that the appellants made a prima facie case against the demand and penalties.

In conclusion, the Tribunal ordered waiver of pre-deposit and stay of recovery of dues until final disposal of the appeals, as the orders did not establish evasion through fraud or wilful misstatement.