2010 (3) TMI 251 - AT - Service Tax

Security services- The appellant is a proprietary concern engaged in providing security services. The original adjudicating authority confirmed the demand for service tax amounting to Rs.3,45,681/- with interest. Further, the penalties were imposed under Section 76 and Section 78 of Finance Act, 1994 equal to the service tax amount. Held that- I hold that the financial difficulty has not been shown and since the appellant does not have a prima facie case, I consider that the appellant should make a deposit of Rs.2 lakhs towards pre-deposit under Section 35F of Central Excise Act, 1944 made applicable to service tax matters by Section 83 of Finance Act, 1994, within eight weeks and report compliance to Commissioner (Appeals) who shall after noting the compliance shall hear the appeal without insisting on any further pre-deposit, has no objection to remand the matter.

Summary

Issues Involved:
1. Service tax liability for the period from 2001 to 2007.
2. Imposition of penalties under Section 76 and Section 78 of Finance Act, 1994.
3. Rejection of appeal due to failure to deposit required amount.
4. Dispute regarding the Commissioner (Appeals) passing the stay order and rejecting the appeal.
5. Validity of the department's case based on bank statements and income tax return.
6. Consideration of financial difficulty for reducing the pre-deposit amount.

Analysis:

1. The appellant, engaged in providing security services, was found to have not paid service tax from 2001 to 2007. The original adjudicating authority confirmed the demand for service tax along with penalties under Section 76 and Section 78 of the Finance Act, 1994.

2. The appellant's appeal was rejected as they failed to deposit the required amount after a stay application. The appellant argued that the appeal rejection by a different Commissioner (Appeals) was incorrect and requested a remand for a decision without pre-deposit.

3. The department's case relied on bank statements showing consideration for services rendered, income tax returns, and the statement of the authorized signatory. The department acknowledged that a portion of the demand was time-barred.

4. The appellant admitted to providing security services, with the authorized signatory confirming the provision of services and providing customer names. The department collected evidence from bank statements, accounts, and other documents to support their case. The Tribunal found the evidence sufficient to require a pre-deposit of Rs.2 lakhs.

5. The Tribunal disposed of the appeal by remand, reducing the pre-deposit amount and allowing the appeal to proceed without further deposit. The stay petition was also disposed of in the same decision.

This detailed analysis covers the various issues involved in the legal judgment, including the service tax liability, penalties, appeal rejection, evidentiary support for the department's case, and the consideration of financial difficulty in determining the pre-deposit amount.