2008 (10) TMI 167 - AT - Service Tax

C/F Agent service - demand on the ground that the appellants had not included the administrative charges and rent collected by it in the taxable value - original authority had dropped the demand in an order passed following the directions contained in the remand order of the Commissioner (A) - department had not challenged the said appellate order and both Commissioner (A) and the original authority had found impugned amount not to be includable in the taxable value - prima facie the Commissioner could not have validly passed an order in revision holding a contrary view stay grnated

Summary

Issues involved:
1. Waiver of pre-deposit of service tax amount demanded from the appellant.
2. Validity of the revision order passed by the Commissioner.
3. Bar on demand due to limitation period.

Analysis:

Issue 1: Waiver of Pre-deposit
The application sought waiver of pre-deposit of an amount demanded from the appellant for short-paid service tax on clearing and forwarding agent's service. The impugned order revised the original authority's decision dropping the demand, based on charges collected towards rent and administrative charges not being actuals but on a flat rate. The appellant argued that the order of the original authority had merged with the Commissioner's order, making the demand final. The appellant also contended that the demand was time-barred as the proposal for penalty had been dropped in the initial order.

Issue 2: Validity of Revision Order
The appellant claimed that the Commissioner could not validly pass a revision order contradicting the appellate order when the department had not challenged the appellate decision. The appellant argued that the Commissioner exceeded his authority under Section 84 of the Finance Act, 1994, to revise the original authority's decision. The impugned order was challenged on the grounds that the Commissioner's revision was not legally sustainable.

Issue 3: Limitation Period
The appellant contended that the demand was barred by limitation since the proposal for penalty had been dropped in the initial order, and a larger period had been invoked. The appellant argued that the demand could not be sustained due to the lapse of the limitation period for imposing the demand.

In the judgment, the Tribunal found that the original authority had dropped the demand following the Commissioner's directions in the remand order. As the department did not challenge the appellate order, the Commissioner could not validly revise the decision on the appellant's liability for service tax. The Tribunal held that the appellant had established a prima facie case against the impugned demand. Consequently, the Tribunal granted a waiver of pre-deposit and stayed the recovery of the demand until the final disposal of the appeal. The order was pronounced and dictated in the open court, providing relief to the appellant pending the final resolution of the appeal.