2009 (6) TMI 100 - AT - Service Tax

Appellant submits that they are not contesting the levy of tax under Business Auxiliary Services . She submits that the applicant is a small unit providing financial assistance to the customers for arranging loan from ICICI Bank. She further submits that the demand is barred by limitation partly. She also submits that the applicant company is suffering from loss as is evident from the balance sheet. I find that the applicant had not disclosed the payment of tax to the Revenue. It is also noticed that the Revenue detected the non-payment of tax and even thereafter the applicant did not deposit tax. Hence, the applicant failed to make out prima facie case of waiver of pre-deposit of entire amount of penalty. After considering the facts and circumstances of the case and the financial hardship of the applicant, stay is granted partly

Summary

Issues: Application for waiver of pre-deposit of tax and penalty under Sections 76 and 78 of Finance Act, 1994.

Analysis:
1. The applicant sought waiver of pre-deposit of tax and penalty amounting to Rs. 1,03,819/- and Rs. 50,000/- respectively under Sections 76 and 78 of the Finance Act, 1994. The advocate representing the appellant acknowledged the tax liability under "Business Auxiliary Services" but highlighted the company's financial struggles, including being a small unit providing financial assistance for loans from ICICI Bank and suffering losses as per the balance sheet. The contention included the argument that the demand was partly time-barred.

2. On the other hand, the Revenue, represented by the Departmental Representative, pointed out the non-payment of tax by the applicant, with Central Excise officers seeking commission details from ICICI Bank, justifying the application of the extended limitation period. The tribunal noted that the applicant failed to disclose tax payment to the Revenue, despite detection of non-payment, leading to a lack of a prima facie case for complete waiver of pre-deposit. Considering the circumstances and financial hardship of the applicant, the tribunal directed the deposit of Rs. 50,000/- towards tax within six weeks. Upon compliance, the pre-deposit of the remaining tax and penalty amount was waived until the appeal's disposal, with a reporting deadline set for July 16, 2009.

This detailed analysis encapsulates the key arguments presented by both parties, the tribunal's evaluation of the case, and the final decision rendered regarding the waiver of pre-deposit of tax and penalty under the Finance Act, 1994.