2010 (5) TMI 236 - AT - Service Tax

Penalty- Held that- service tax liability admitted and volunteered to pay entire amount with interest. Penalty alone contested and the same considered by adjudicating authority. Tax liability not an issue before adjudicating authority. Application seeking inclusion of additional ground being though, not allowed.

Summary

Issues:
1. Incorporation of additional grounds in the memo of appeal
2. Waiver of pre-deposit and stay of recovery in respect of penalties

Analysis:
Issue 1: Incorporation of additional grounds in the memo of appeal
The appellant sought to challenge the demand of service tax by incorporating additional grounds in the memo of appeal. The appellant's consultant argued that the taxability of the appellant's activity was a fundamental issue. However, the JCDR contended that there was no dispute regarding the tax liability as it was conceded by the party earlier. The Tribunal noted that the appellant had admitted their tax liability and only contested the penal liability. The Tribunal found that the tax liability was not in question before the lower authority and that the additional ground of appeal was an afterthought. Consequently, the Tribunal rejected the application to incorporate additional grounds in the memo of appeal.

Issue 2: Waiver of pre-deposit and stay of recovery in respect of penalties
The appellant requested waiver of pre-deposit and stay of recovery specifically for the penalties imposed. The Tribunal observed that the appellant had already paid the service tax with interest, which was not in dispute. After hearing both sides, the Tribunal granted the waiver of pre-deposit and stay of recovery in relation to the penalties imposed on the appellant. This decision was based on the fact that the service tax with interest had been paid by the appellant, and the application sought relief only concerning the penalties.

In conclusion, the Tribunal rejected the application to incorporate additional grounds in the memo of appeal, considering that the tax liability was not contested earlier. However, the Tribunal granted the waiver of pre-deposit and stay of recovery for the penalties imposed, as the service tax with interest had already been paid by the appellant.