2010 (6) TMI 314 - AT - Service Tax

Commissioner (Appeals) has dismissed the appeal - on the ground of non-compliance with the stay order - directed the appellant to deposit 50% of the confirmed Service Tax - imposition of penalties on the ground that they have received the freight charges which do not stand included in the taxable value of services being rendered by them under the category of Clearing & Forwarding (C&F) Agent - Held that - direction to deposit 50% of the amount cannot be justified - set aside the order and remand the matter to Commissioner (Appeals) - appeal gets disposed off in above manner

Summary

Issues:
1. Dismissal of appeal for non-compliance with stay order.
2. Tax confirmed against the appellant for freight charges.
3. Direction to deposit 50% of confirmed Service Tax.
4. Applicability of Tribunal decisions on value under C&F Agent.
5. Setting aside the impugned order and remanding the matter.

Issue 1: Dismissal of appeal for non-compliance with stay order
The Commissioner (Appeals) dismissed the appeal filed by the appellant due to non-compliance with the stay order, which directed the appellant to deposit 50% of the confirmed Service Tax. The Tribunal found this ground for dismissal to be unjustified and set aside the impugned order, remanding the matter for a decision on merit without insisting on any pre-deposit.

Issue 2: Tax confirmed against the appellant for freight charges
The appellant was confirmed to owe service tax amounting to Rs. 7,75,076, along with penalties, for receiving freight charges of Rs. 62,70,839, not included in the taxable value of services as a 'Clearing & Forwarding (C&F) Agent.' The appellant argued that transportation charges do not form part of the value under C&F Agent, citing Tribunal decisions and a previous order in their favor by the Commissioner (Appeals).

Issue 3: Direction to deposit 50% of confirmed Service Tax
Despite the appellant's contentions and previous favorable orders, the Commissioner (Appeals) directed the appellant to deposit 50% of the duty without considering their plea or the Tribunal's decisions. The Tribunal deemed this direction unjustified, especially considering the previous order in favor of the same assessee, and set aside the order, remanding the matter for a decision on merit without any pre-deposit requirement.

Issue 4: Applicability of Tribunal decisions on value under C&F Agent
The Tribunal noted that the Commissioner (Appeals) failed to appreciate the appellant's plea and relevant Tribunal decisions regarding the value under C&F Agent. By considering the law declared by the Tribunal in similar matters and the benefit extended to the appellant in a previous order, the Tribunal set aside the impugned order and remanded the matter for a decision on merit without insisting on any pre-deposit.

Issue 5: Setting aside the impugned order and remanding the matter
Ultimately, the Tribunal set aside the impugned order that directed the appellant to deposit 50% of the confirmed Service Tax and remanded the matter to the Commissioner (Appeals) for a decision on merit, taking into account relevant decisions and without requiring any pre-deposit. The stay petition and appeal were disposed of accordingly.

This comprehensive analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT, AHMEDABAD, emphasizing the dismissal of the appeal, tax confirmation, deposit directions, Tribunal decisions, and the final decision to set aside the impugned order and remand the matter for further consideration.