Case Law Details

Case Name : M/s Indravadan C Patel Vs CCE (CESTAT Ahemdabad)
Appeal Number : Appeal No. ST/178/2010
Date of Judgement/Order : 22/02/2011
Related Assessment Year :
Courts : All CESTAT (612) CESTAT Ahmedabad (101)

Indravadan C Patel Vs. CCE, Vadodara (Cestat Ahmedabad)- We have considered the submissions made by the learned counsel. We find that the appellant’s contention that Rs.7,50,000/- should have been adjusted towards pre- deposit out of the amount paid in September 2009 is not correct and we also note that the Commissioner has taken note of this payment. It has been specifically stated in the order that this amount was towards service tax dues for the period from October 2008 to March 2009 and even after payment of this amount, there was a shortfall since the amount payable was Rs.12,63,018/-. Therefore the question of adjustment any amount towards pre-deposit does not arise as rightly observed by Commissioner (Appeals). This is a case where clearly the appellant had collected the service tax but failed to pay the tax to the government. Further even after proceedings were initiated, the full tax is yet to be paid and there is a balance of Rs.1,93,144/- pending payment. Under these circumstances we find that the stay order of the Commissioner requiring the appellants to deposit an amount of Rs.7.5 lakhs was not unreasonable and should have been complied with. This is in view of the fact that even after the payment of Rs.7.5 lakhs, the appellant would have paid approximately 25% towards penalty and full amount of service tax without taking into account the interest liability.

CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, AHMEDABAD
Application No.ST/S/492/2010
Appeal No. ST/178/2010

Arising out of Order-in-Appeal No.Commr.(A)/301/VDR-I/2009, Dated: 1.1.2010

Date of Decision: 22.02.2011

M/s INDRAVADAN C PATEL

Vs

CCE, VADODARA

ORDER NO.A/354/WZB/AHD/2011
S/109/WZB/AHD/2011

Per: B S V Murthy:

Appellant is engaged in providing the service of manpower supply and during the period from 16.06.05 to 31.03.07 appellant defaulted in payment of service tax amounting to Rs.22,30,352/- even though the amount of service tax had been collected from the customers. During the investigation, the appellant paid an amount of Rs.20,37,208/-. After proceedings, the adjudicating authority confirmed the demand for service tax with interest and also imposed penalties under Section 76 & 78 of Finance Act, 1994. On an appeal filed by the appellant, the Commissioner (Appeals) vide his stay order required the appellants to deposit an amount of Rs.7.5 lakhs. Since this was not deposited, appeal has been rejected for non compliance with that stay order.

2. The learned advocate on behalf of the appellants submitted that appellant had paid an amount of Rs.11,74,540/- and this amount was paid in the month of September 2009. He submitted that his request for adjusting Rs.7,50,000/- towards pre- deposit out of this amount has not been considered by the Commissioner (Appeals). He also submitted that appellant had financial difficulty and therefore could not make payments of service tax during the relevant period. It was also submitted that subsequently he has been quite regular in paying the service tax. He also submitted that penalty has also been imposed under Section 76 & 78 of Finance Act, 1994 which is contrary to the settled legal position.

3. We have considered the submissions made by the learned counsel. We find that the appellant’s contention that Rs.7,50,000/- should have been adjusted towards pre- deposit out of the amount paid in September 2009 is not correct and we also note that the Commissioner has taken note of this payment. It has been specifically stated in the order that this amount was towards service tax dues for the period from October 2008 to March 2009 and even after payment of this amount, there was a shortfall since the amount payable was Rs.12,63,018/-. Therefore the question of adjustment any amount towards pre-deposit does not arise as rightly observed by Commissioner (Appeals). This is a case where clearly the appellant had collected the service tax but failed to pay the tax to the government. Further even after proceedings were initiated, the full tax is yet to be paid and there is a balance of Rs.1,93,144/- pending payment. Under these circumstances we find that the stay order of the Commissioner requiring the appellants to deposit an amount of Rs.7.5 lakhs was not unreasonable and should have been complied with. This is in view of the fact that even after the payment of Rs.7.5 lakhs, the appellant would have paid approximately 25% towards penalty and full amount of service tax without taking into account the interest liability.

4. In view of the above position, we consider it appropriate that appellant should be required to deposit the amount as per the stay order of the Commissioner and accordingly direct the appellant to deposit this amount within six weeks and report compliance to Commissioner (Appeals) who will take note of the compliance and decide the appeal on merits after giving reasonable opportunity to the appellants. Stay petition as well as appeal get disposed of in above terms.

(Dictated & Pronounced in Court)

More Under Service Tax

Posted Under

Category : Service Tax (3296)
Type : Judiciary (10460)
Tags : Cestat judgments (801)

Leave a Reply

Your email address will not be published. Required fields are marked *