2013 (10) TMI 483 - AT - Service Tax

Determination of tax liability u/s 73 - demand of service tax collected but not deposited - Retrospective Effect of Section 73A(2) OR Not - Waiver of Pre-deposit Held that - The entire demand of the service tax liability had been worked out under Section 73 of the Finance Act, 1994 based upon the reconciliation of balance sheet figure shown as income under ST-3 returns - appellant was claiming deductions from such figures which had not been properly addressed to by the lower authorities in the order - If a deduction claimed by the appellant was in accordance with the law, it was possible that service tax liability could be less. Section 73A was brought into the statute from 18.04.2006 and hence, any demand under this Section prior to 18.4.2006 would not survive - Post 18.4.2006 the demand needs to be considered according to the provisions under section 73A (2) of the Finance Act, 1994 - Both these issues seem to be not addressed by the adjudicating authority despite being raised before him - the issue needed reconsideration by the adjudicating authority in depth - The appellant should be put to some conditions to hear and dispose the matter by the adjudicating authority Appellant was directed to submit Pre-deposit of the Duty upon such submission rest of the duty to be waived till the disposal Partial Stay granted

Issues:
1. Stay petition for waiver of pre-deposit of service tax liability.
2. Disposal of appeal based on the stay petition.
3. Service tax liability under Section 73 of the Finance Act, 1994.
4. Demand under Section 73A of the Finance Act, 1994.
5. Consideration of deductions claimed by the appellant.
6. Requirement of Chartered Accountant Certificate.
7. Reconciliation of balance sheet figures.
8. Compliance with deposit conditions set by the Tribunal.
9. Adjudicating authority's failure to address raised issues.
10. Applicability of Section 73A pre and post 18.04.2006.

Analysis:
The Appellate Tribunal CESTAT Ahmedabad heard a stay petition seeking the waiver of pre-deposit of service tax liability and the amount collected as service tax by the appellant from customers. The Tribunal decided to dispose of the appeal after hearing both sides and examining the records. It was noted that the service tax liability of Rs. 25.60 Lakhs was calculated under Section 73 of the Finance Act, 1994 based on income reconciliation from ST-3 returns. The appellant claimed deductions that were not adequately addressed by the lower authorities. The Tribunal emphasized the need for the adjudicating authority to consider the deductions claimed by the appellant to determine the correct service tax liability. Additionally, a demand of Rs. 61.64 Lakhs under Section 73A of the Finance Act, 1994 was discussed, with the Tribunal highlighting the importance of addressing issues raised before the authority.

The Tribunal directed the appellant to deposit Rs. 6,00,000 within four weeks and report compliance before the adjudicating authority. It was emphasized that the compliance would be assessed by the authority before proceeding with the case. The Tribunal clarified that it had not expressed any opinion on the case's merits and left all issues open for the adjudicating authority's consideration. The Tribunal stressed the need for a thorough reconsideration of the issues by the adjudicating authority, ensuring compliance with the principles of natural justice. The judgment highlighted the importance of addressing all aspects of the case, including the appellant's claims, reconciliation of figures, and the applicability of relevant statutory provisions pre and post specific dates.

Overall, the Tribunal's decision focused on the proper assessment of the appellant's service tax liability, the necessity of addressing claimed deductions, and the compliance requirements set forth by the Tribunal for further adjudication by the authority. The judgment underscored the importance of a comprehensive review of the issues raised and the adherence to legal procedures in reaching a final decision on the matter.

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