2009 (10) TMI 208 - AT - Service Tax

Rent-a-cab operator scheme- The original authority had confirmed a service tax of Rs. 5,93,032 found due from the appellant under the category rent-a-cab operator scheme . He had also imposed penalties under different sections of the Finance Act, 1994. The Commissioner (Appeals) had directed the appellants to pre-deposit an amount of Rs. 2,00,000 for hearing the appeal. Held that- We find that pre-deposit of Rs. 35,000 is adequate to consider the appeal on merits. In the circumstances we order that the appellants shall make pre-deposit as offered and report compliance to the Commissioner (Appeals) on 27-11-2009. On report of such compliance the Commissioner (Appeals) shall decide the appeal on merits. The stay application and appeal are disposed of by way of remand to the Commissioner (Appeals).

Issues:
1. Dismissal of appeal for failure to comply with section 35F of the CE Act.
2. Confirmation of service tax and penalties under the Finance Act, 1994.
3. Application for waiver of pre-deposit and stay of recovery of adjudged dues.
4. Consideration of financial hardship by the Commissioner (Appeals).
5. Decision on pre-deposit amount and remand to the Commissioner (Appeals).

Issue 1: Dismissal of appeal for failure to comply with section 35F of the CE Act
The Commissioner (Appeals) dismissed the appeal filed by the appellant M/s. Balasai Travels for their failure to comply with section 35F of the CE Act. The original authority confirmed a service tax of Rs. 5,93,032 under the 'rent-a-cab operator scheme' and imposed penalties under the Finance Act, 1994. The Commissioner (Appeals) directed the appellants to pre-deposit Rs. 2,00,000 for hearing the appeal.

Issue 2: Confirmation of service tax and penalties under the Finance Act, 1994
The original authority confirmed the service tax due from the appellant under the 'rent-a-cab operator scheme' and imposed penalties under the Finance Act, 1994. The Commissioner (Appeals) upheld the decision and directed the appellants to pre-deposit an amount of Rs. 2,00,000 for the appeal.

Issue 3: Application for waiver of pre-deposit and stay of recovery of adjudged dues
The appellant moved an application for waiver of pre-deposit and stay of recovery of adjudged dues. The appellant's counsel argued that the order of the original authority was passed in de novo proceedings and that in the first round, the Commissioner (Appeals) had waived the pre-deposit due to financial hardship. The appellant offered to pre-deposit Rs. 35,000, stating that the service tax for provision of passenger vehicles was approximately that amount.

Issue 4: Consideration of financial hardship by the Commissioner (Appeals)
The Commissioner (Appeals) had not insisted on pre-deposit in the first round, considering the financial hardship of the appellants. The appellant's financial difficulty was explained in their appeal before the Commissioner (Appeals), which was taken into consideration. The representative of the appellants offered to make a pre-deposit of Rs. 35,000 towards the tax liability for provision of passenger vehicles.

Issue 5: Decision on pre-deposit amount and remand to the Commissioner (Appeals)
After considering the facts and submissions, it was found that pre-deposit of Rs. 35,000 was adequate to consider the appeal on merits. The appellants were ordered to make the pre-deposit and report compliance to the Commissioner (Appeals) by a specified date. The stay application and appeal were disposed of by way of remand to the Commissioner (Appeals) for further proceedings.

This detailed analysis of the judgment highlights the issues involved, the decisions made by the authorities, and the considerations taken into account regarding pre-deposit, financial hardship, and the remand of the case for further proceedings.

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