2014 (2) TMI 194 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - erection, commissioning or installation service - management, maintenance or repair service - Held that - appellant were executing works awarded by the main contractor and that the latter had paid service tax. Where they could prove this claim, the adjudicating authority granted the benefit. No further proof is forthcoming and therefore, prima facie, the appellant cannot be absolved of tax liability on the above ground. There is no plea of financial hardships in this application. But there is a plea of limitation against the impugned demand - Assessee directed to make a pre deposit - Conditional stay granted.

Summary

Issues: Application for waiver and stay of adjudged dues; Taxability of services provided; Proof of main contractor paying service tax; Financial hardship plea; Limitation plea.

Analysis:
1. Application for Waiver and Stay: The appellant filed an application seeking waiver and stay in relation to the adjudged dues amounting to Rs.54,46,098/- for erection, commissioning, or installation service and Rs.18,30,514/- for management, maintenance, or repair service. The appellant claimed that they were executing works awarded by the main contractor who had paid service tax on the same, but failed to provide sufficient proof. Consequently, the demands were confirmed against the appellant. An amount of Rs.29,47,803/- was paid by the appellant and appropriated by the adjudicating authority, leaving a balance of around Rs.43 lakhs as per the impugned order.

2. Representation and Adjournment: Despite the appellant being granted ad interim stay, there was no representation during the hearing. A Chartered Accountant for the appellant sought an adjournment through a faxed letter, which was deemed prejudicial to the revenue as the stay order was passed without considering the revenue's case. The lack of representation hindered the proceedings and raised concerns regarding the appellant's commitment to the case.

3. Taxability and Proof of Payment: The taxability of the services provided was not in dispute. The appellant's defense rested on the assertion that the main contractor had paid the service tax, but insufficient proof was provided. The adjudicating authority granted benefits where the claim was substantiated. However, without additional evidence, the appellant could not be absolved of tax liability. The absence of financial hardship plea further weakened the appellant's case, although a limitation plea was raised belatedly.

4. Pre-Deposit and Compliance: In light of the circumstances, the appellant was directed to pre-deposit Rs.25,00,000/- within six weeks from the receipt of the order and report compliance to the Deputy Registrar by a specified date. Failure to comply would result in no waiver and stay of the remaining dues. The directive aimed to ensure the appellant's commitment to the process and the timely resolution of the outstanding tax liability.

In conclusion, the judgment addressed the appellant's application for waiver and stay, highlighting the importance of providing adequate proof of tax payment by the main contractor and complying with procedural requirements to resolve the tax liability issue effectively.