2009 (3) TMI 120 - AT - Service Tax

Rate of Service Tax Increase in Rate of Service Tax from 5% to 8% w.e.f. 13.5.2003 - According to the assessee, they received a sum of Rs. 20,46,13,925/- during the month of July, 2004 which relates to services rendered by them for the period from August, 2000 to July, 2004; that the rate of service tax was only 5% in respect of services rendered upto 13.5.03 and only for the rest of the period the rate of tax is 8%. This claim has been accepted on principle by the Commissioner in his order dated 25.1.2006 The dispute is on the issue of quantification matter remanded

Summary

Issues:
1. Demand of service tax based on incorrect rate application.
2. Application for rectification of mistake.
3. Appeal against the order confirming the demand.
4. Stay petition rejection.
5. Application for condonation of delay.
6. Application for modification of stay order.
7. Condonation of delay in filing the appeal.
8. Waiver of pre-deposit requirement.
9. Dispute regarding the rate of service tax applied.
10. Remand for fresh consideration by the Commissioner.

Analysis:
1. The appellant received a show cause notice proposing a demand of service tax due to the incorrect application of the tax rate during a specific period. The Commissioner confirmed a demand of Rs. 5,97,389 based on the submissions made by the appellant. However, the appellant filed an application for rectification of mistake, which was rejected by the Commissioner. Subsequently, appeals and applications related to this issue were filed.

2. The appellant filed an appeal against the order confirming the demand and also a stay petition. The Tribunal rejected the stay petition as there was no demand of service tax in the order disposing of the rectification application. This led to the filing of an appeal against the initial order along with an application for condonation of delay and modification of the stay order for the recovery of dues.

3. The Tribunal, after hearing the miscellaneous applications, condoned the delay in filing one of the appeals and waived the pre-deposit requirement. The appeals were then disposed of based on the arguments presented by the parties.

4. The dispute revolved around the rate of service tax applied to the services rendered by the appellant. The appellant claimed that certain sums should have been taxed at a lower rate as they related to services rendered before a specific date. The Tribunal found merit in this claim and set aside the Commissioner's orders, remanding the matter for fresh consideration after providing an opportunity for the appellant to present evidence.

5. The miscellaneous application and application for condonation of delay were also disposed of as part of the overall judgment, ensuring all related matters were addressed comprehensively.