2010 (2) TMI 379 - AT - Service Tax

Consulting Engineer Service- Intellectual Property Service- The appellants had entered into agreements with foreign collaborators for transfer of technology and know-how for manufacture of certain products. Held that- that once an appeal is allowed on the very same issue in the applicant s own case, and no appeal having been filed by the Revenue against such an order, the earlier order of the Commissioner (Appeals) is binding on the department and had attained finality. Also find that out of the total service tax, the applicant has already deposited an amount of Rs. 12,23,038/- which is considered as enough deposit for the purpose of hearing the appeal. Accordingly the stay petition for waiver of pre-deposit of the balance amounts of service tax, interest and penalty is allowed and recovery thereof stayed till the disposal of the appeal.

Summary

Issues involved:
Service tax liability on 'Consulting Engineer Service' and 'Intellectual Property Service'.

Analysis:
The appellant filed a stay petition seeking waiver of pre-deposit of service tax, interest, and penalties amounting to Rs. 65,38,270, penalty under Section 76 of the Finance Act, 1994, and penalty under Section 77 of the Act. The Tribunal considered the issue of service tax liability on the appellant for 'Consulting Engineer Service' and 'Intellectual Property Service'. It was noted that in the appellant's own case, a demand raised earlier by the Central Excise authorities was set aside by the Commissioner (Appeals). Another show cause notice was issued proposing service tax on the same royalty payments made to foreign collaborators. The Tribunal held that since an appeal was allowed in the appellant's own case and no appeal was filed by the Revenue against such order, the earlier order of the Commissioner (Appeals) was binding on the department and had attained finality. Additionally, the appellant had already deposited a significant amount of the total service tax, which was considered sufficient for the purpose of hearing the appeal. Therefore, the Tribunal allowed the stay petition for waiver of pre-deposit of the balance amounts of service tax, interest, and penalty, and stayed the recovery till the disposal of the appeal.

This judgment highlights the importance of previous decisions in similar cases and the finality they carry, especially when no appeal is filed by the Revenue against such decisions. It also emphasizes the significance of the amount already deposited by the appellant in determining the necessity of pre-deposit for the purpose of hearing the appeal. The Tribunal's decision to allow the stay petition and stay the recovery of the balance amounts till the appeal's disposal showcases a balanced approach in considering the appellant's financial obligations during the legal proceedings.