Tribunal orders Rs. 1.5 crores deposit, stays recovery pending appeal

The Tribunal directed the applicant to deposit Rs. 1.5 crores within eight weeks, with the remaining amount waived if complied with by a specified date, thereby staying the recovery during the appeal's pendency. The Tribunal found merit in the Revenue's argument due to the lack of evidence presented by the applicant regarding goods and raw materials sold, leading to the partial waiver of the pre-deposit amount contingent upon the specified deposit being made within the stipulated timeframe.

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Issues: Application for waiver of pre-deposit of service tax, eligibility for benefit under Notification No. 12/2003-ST, financial hardships, documentary proof of goods sold, waiver of pre-deposit amount

The judgment pertains to an application for the waiver of pre-deposit of service tax, interest, and penalty amounting to Rs. 3,74,25,377. The applicant's demand was confirmed due to wrongly availing the benefit of Notification No. 01/2006-ST for Finishing and Completion Service from 2005-06 to 2008-09. The applicant argued that the contracts were works contracts and not liable for service tax under Finishing and Completion Service before 1.6.2007. They claimed entitlement to the benefit under Notification No. 12/2003-ST, exempting the value of goods sold if specific conditions were met. The applicant failed to provide evidence of financial hardships by not submitting a balance sheet.

The Revenue contended that even if the applicant provided works contract services from 1.6.2007, they were still liable for around Rs. 2 crores and not eligible for the Notification benefit due to lack of documented proof. The Tribunal noted that evidence of goods and raw materials sold was not presented by the applicant, supporting the Revenue's stance. Consequently, the Tribunal directed the applicant to deposit Rs. 1.5 crores within eight weeks, with the remaining amount waived if complied with by a specified date, thereby staying the recovery during the appeal's pendency.

In summary, the Tribunal found merit in the Revenue's argument due to the lack of evidence presented by the applicant regarding goods and raw materials sold, leading to the partial waiver of the pre-deposit amount contingent upon the specified deposit being made within the stipulated timeframe.

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