2014 (1) TMI 1144 - AT - Service Tax

Waiver of pre-deposit of Service Tax - Imposition of penalty of identical amount - Rent-a-cab services - Held that - applicant was primarily engaged in providing buses to various companies for carrying their employees from their residence to office and back. The appellants jurisdictional Central Excise officer wrote a letter on 16-1-2002 directing the applicant to get themselves registered under the tour-operator-services . The said letter was contested by the applicant by submitting that they do not fall under the said category and there is no requirement for registration - demand for the longer period is barred by limitation i.e. for the period April, 2000 to September, 2003, show cause notice was issued in January, 2004. Correspondence exchanged between the Revenue and the appellant clearly show that Revenue was aware of the activity of the appellant right from January, 2002 in which case no suppression or mis-statement could be attributable to the appellant. We also further note that the demand of Service Tax which falls within the period of limitation stands deposited by the appellant to the extent of Rs. 50,766/- along with interest of Rs. 12,650/-. As such, considering said deposit of Service Tax which falls within the period of limitation as sufficient deposit for the purpose of Section 35F, we dispense with the condition of pre-deposit of balance amount of Service Tax and entire amount of penalty and stay recovery of the same during the pendency of the appeal - Stay granted.

Summary

Issues:
Prayer to dispense with pre-deposit of Service Tax confirmed with penalty - Allegation of providing 'rent-a-cab' services without paying Service Tax - Jurisdictional officer's directive for registration under 'tour-operator-services' - Search, procurement of documents, Show Cause Notice - Compensation received considered as service charges - Lack of evidence for rent-a-cab services - Barred demand by limitation - Deposit of Service Tax within limitation period - Stay petition granted.

Analysis:

The judgment revolves around the application seeking to dispense with the pre-deposit condition of Service Tax and penalty amount confirmed against the applicant for allegedly providing 'rent-a-cab' services without paying Service Tax. The applicant primarily provided buses to companies for employee transportation. The jurisdictional officer directed registration under 'tour-operator-services,' which was contested by the applicant. Subsequently, a search was conducted, documents were obtained, and a Show Cause Notice was issued in 2004 based on the allegation of providing 'rent-a-cab' services.

The Tribunal observed that the compensation received by the applicant from customers, considered as service charges, could not solely be attributed to 'rent-a-cab' services due to the lack of documentary evidence. The Revenue failed to substantiate the claim that the applicant provided such services. The onus lay on the Revenue to prove the allegation. The argument that the appellant's firm was closed and lacked documents did not strengthen the Revenue's case as they had conducted the searches and seized all documents. The demand for the period from April 2000 to September 2003 was barred by limitation, as the Revenue was aware of the appellant's activities since January 2002, negating any suppression or misstatement by the appellant.

Furthermore, the Tribunal noted that the Service Tax falling within the limitation period had been deposited by the appellant, along with interest. Considering this deposit as sufficient under Section 35F, the Tribunal dispensed with the pre-deposit condition of the remaining Service Tax and penalty amount, staying the recovery during the appeal's pendency. Ultimately, the stay petition was allowed in favor of the appellant, granting relief from the pre-deposit condition and halting the recovery process.