2014 (7) TMI 850 - AT - Service Tax

Waiver of predeposit of Service Tax - quantification/computation of the demand - Held that - from the records it is found that the CAs Certificate and other evidences now produced by the ld. CA for the Applicant, were not placed before the ld. Commissioner. In the result, in the interest of justice, at this stage, the offer to deposit ₹ 10.00 lakh seems to be reasonable. Consequently, we direct the Appellant to deposit ₹ 10.00 lakh within a period of four weeks from today and report compliance directly, to the ld. Commissioner. matter remanded back - Decided in favour of assessee.

Summary

Issues: Application for waiver of predeposit of Service Tax and penalty under Finance Act, 1994.

In this judgment by the Appellate Tribunal CESTAT KOLKATA, the Applicant sought waiver of predeposit of Service Tax amounting to Rs. 1.09 crore and an equal penalty under Sections 77 and 78 of the Finance Act, 1994. The Applicant, a construction service provider, argued that the Service Tax demand included amounts from sub-contracting, non-taxable services, and free issue materials supplied by clients for construction services. The Applicant contended that the demand was confirmed without proper analysis of its chargeability to Service Tax. The Applicant, through their Chartered Accountant, offered to make a predeposit of Rs. 10.00 lakh and requested the matter to be remitted to the Commissioner for reevaluation. The Revenue supported remanding the case for fresh adjudication based on new evidence presented. The Tribunal decided to finalize the Appeal at that stage with the consent of both parties.

The main issue revolved around the quantification and chargeability of the Service Tax demand, including the nature of services provided as a sub-contractor, receipts from non-taxable services, and the value of free issue materials supplied by clients. The Tribunal noted that crucial evidence presented by the Applicant's Chartered Accountant was not considered by the Commissioner during the initial adjudication. In the interest of justice, the Tribunal found the offer to deposit Rs. 10.00 lakh reasonable and directed the Applicant to make the deposit within four weeks. The Commissioner was instructed to reconsider the issue taking into account the deposit and providing the Applicant with a fair opportunity to present their case. Both parties were allowed to submit additional evidence, and all issues were left open for further examination. The Appeal was allowed by remanding the case back to the Commissioner for fresh consideration, and the Stay Petition was disposed of accordingly.