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2018 (5) TMI 27 - AT - Service TaxPre-deposit - Section 35F of Central Excise Act, 1944 - stay on realization of amount of pre-deposit as calculated by Revenue - Held that - The stand of Revenue does not appear to be logical since total enforceable demand of tax is the basis for calculation of the percentage towards pre-deposit - application for stay of realization of balance demand is allowed - application allowed.
Issues: Stay application to prevent recovery of service tax demand beyond 7.5% - Calculation of pre-deposit amount - Dispute over appropriated amount - Logical basis for pre-deposit calculation - Stay granted on balance demand during appeal pendency.
In the case before the Appellate Tribunal CESTAT MUMBAI, the issue revolved around a stay application seeking to prevent the recovery of a service tax demand exceeding 7.5% of the total demand. The total demand of &8377; 7,69,42,391/- was raised in the adjudication order, with the appellant arguing that a pre-deposit of &8377; 57,70,679/- under Section 35F of the Central Excise Act, 1944 would suffice. However, the Revenue had already recovered &8377; 83 lakhs, which they claimed covered the statutorily required pre-deposit amount. The Tribunal noted that the calculation provided by the appellant's counsel, undisputed by the Revenue, supported the contention regarding the pre-deposit amount. The Revenue disputed only the appropriation of &8377; 83 lakhs towards an admitted demand of &8377; 95,76,131/-, arguing it should not be considered. They proposed a direction to deposit 7.5% of the remaining demand, comprising &8377; 4,22,76,109/- and &8377; 2,50,90,151/-. The Tribunal found the Revenue's stance illogical, emphasizing that the total enforceable demand of tax forms the basis for calculating the pre-deposit percentage. Consequently, the application for a stay on the realization of the balance demand was granted, with no recovery permitted during the appeal's pendency. The decision allowed the appeal to proceed in due course, providing relief to the appellant during the ongoing legal process.
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