2013 (11) TMI 867 - AT - Service Tax

Stay application - Waiver of pre deposit - Issuance of receipts in the name of individual teachers, while the coaching was conducted under a particular name of educational institute - Held that - Assessee s counsel is disputing the service tax liability to an extent that the appellants were not conducting commercial and coaching classes. The submission of the assessee that they have only hired out the place for the individual teachers needs to be gone into detail as there were no evidences indicating that the amounts for imparting coaching classes, were conducted in the name of the individual teachers and that the appellants were hiring out the place. It is also noted that on specific request from the bench, no evidences viz. balance sheets during the relevant period are produced. In the absence of any evidence, the argument needs to be gone into detail which can be done only at the time of final disposal of appeal - Prima facie case not in favour of assessee - Stay granted partly.

Summary

Issues: Stay petition for waiver of pre-deposit of service tax liability confirmed by lower authorities due to alleged short payment during 2005-06 to 2006-07. Violation of principles of natural justice, dispute over conducting commercial and coaching classes, lack of evidence presented by the appellant.

Analysis:
1. The appellant filed a stay petition seeking waiver of pre-deposit of the service tax liability confirmed by the adjudicating authority and upheld by the first appellate authority. The service tax liability was established based on the appellant's alleged short payment during the period of 2005-06 to 2006-07.

2. Both lower authorities concluded that the appellant issued receipts in the name of individual teachers while conducting coaching under the educational institute's name. This finding was supported by statements from the proprietor and proprietress of the education center, as well as demands from the Income Tax Department following a scrutiny/survey of the appellant's premises.

3. The appellant's counsel argued that there was a violation of natural justice as the appellant was denied an adjournment to produce relevant records before the adjudicating authority. The appellant claimed they were not aware of the service tax law and signed statements under officer's direction. The counsel emphasized the need for reconsideration due to the alleged procedural irregularities.

4. The Department's representative highlighted that the appellant had admitted to unaccounted income from commercial and coaching classes. The appellant had obtained and later surrendered service tax registration for conducting these classes. The Department argued against the appellant's claim of only renting out space to individual teachers.

5. After considering both parties' submissions and examining the records, the tribunal found the appellant's dispute regarding conducting commercial and coaching classes required further investigation. The tribunal noted the lack of evidence supporting the appellant's claims, such as balance sheets from the relevant period. The tribunal directed the appellant to deposit Rs. 1,50,000 in addition to the already deposited amount for the appeal's hearing and disposal.

6. The tribunal ordered the appellant to comply with the deposit within eight weeks and report back for further proceedings. Upon compliance, the waiver of pre-deposit for the remaining amounts was allowed, and recovery was stayed pending the appeal's final disposal.