2013 (9) TMI 954 - AT - Service Tax

Demand - Non payment of service tax on GTA services under reverse charnge - Held that - Considering the fact that the applicant has already deposited the service tax amount along with interest, I consider such deposit sufficient for admission of appeal. Therefore, predeposit of balance dues is waived and its collection stayed during the pendency of the appeal - stay granted.

Summary

Issues: Liability to pay service tax on services received from Goods Transport Agency, contesting penalties and interest, abatement under Notifications, admission of appeal based on predeposit

Liability to pay service tax on services received from Goods Transport Agency:
The applicant, a manufacturer of excisable goods, received services from a Goods Transport Agency without paying service tax from 1.1.2005 to 1.7.2008. Upon being notified of the tax liability, they paid an amount of Rs.50,000 on 26.12.2008. Subsequently, a show-cause notice was issued for recovery of service tax amounting to Rs.2,18,064 along with interest and penalties. The Commissioner (Appeals) confirmed the tax liability along with interest and penalties under Sections 76 and 78 of the Finance Act, 1994. The applicant did not contest the tax liability before the Commissioner (Appeals) but challenged the penalties and interest imposed.

Contesting penalties and interest:
Before the Commissioner (Appeals), the applicant contested the penalties and interest imposed on them. Relief was granted in respect of penalty under Section 76 by invoking Section 80 of the Finance Act, 1994. The applicant has now filed an appeal challenging both the tax liability and the penalties imposed, along with a stay petition. The learned counsel representing the applicant argued that the applicant did not receive abatement under Notification No.32/2004-ST dated 3.12.2004 and Notification No.1/2006-ST dated 1.3.2006, which would substantially reduce their liability if granted.

Abatement under Notifications and admission of appeal based on predeposit:
The counsel for the applicant contended that if a 75% abatement is granted from the taxable value, the liability would be significantly reduced. The Assistant Commissioner opposed this argument, stating that since the applicant did not challenge the tax liability before the Commissioner (Appeals), they cannot reopen the matter in the current appeal. However, the Tribunal considered the fact that the applicant had already deposited the service tax amount along with interest and waived the predeposit of balance dues, staying its collection during the appeal's pendency.

In conclusion, the Tribunal admitted the appeal based on the deposit made by the applicant and stayed the collection of the balance dues during the appeal process.