2008 (3) TMI 62 - HC - Service Tax

Petitioner were directed to deposit service tax for being not entitled to benefit of Notification application for waiver of pre-deposit & stay - petitioner has a small colour laboratory & by asking it to deposit the amount of Rs. 2,75,042/-, its right of having the correctness of the order passed by the Asst. Comm. examined by the appellate authority would be lost - 50% of the amount of 2,75,042 deserves to be waived on payment of 50% of amount, appeal would be restored to file of Commissioner (Appeals)

Summary

Issues:
1. Service tax liability and penalties imposed by Assistant Commissioner.
2. Appeal to Commissioner of Central Excise (Appeals) and waiver of pre-deposit.
3. Financial condition of the petitioner and request for partial waiver.
4. Decision on the petition and modification of previous orders.

Analysis:
1. The judgment addressed the service tax liability and penalties imposed by the Assistant Commissioner on the petitioner for short-paid service tax. The Assistant Commissioner directed the petitioner to deposit Rs. 2,75,042 for service tax and imposed penalties under various sections of the Finance Act, 1994. The petitioner challenged this order through a writ petition.

2. The petitioner appealed to the Commissioner of Central Excise (Appeals) against the Assistant Commissioner's order and requested a waiver of pre-deposit. The Commissioner (Appeals) directed the petitioner to deposit the amount, failing which the appeal would stand rejected. The petitioner did not comply and filed a writ petition challenging the order.

3. The judgment considered the financial condition of the petitioner by examining the balance sheet for the year 2005-2006. It was noted that the petitioner had a small color laboratory and depositing the full amount would hinder its right to appeal. The court found that the petitioner deserved a partial waiver of 50% of the amount, totaling Rs. 1,37,521.

4. As a result, the court disposed of the writ petition by ordering the petitioner to deposit Rs. 1,37,521 with the Commissioner of Appeals within two weeks. Failure to do so would uphold the previous orders. The judgment modified the earlier orders and restored the appeal to the file of the Commissioner (Appeals-I), Customs and Central Excise, Jaipur. No costs were awarded in this matter.