Tribunal Orders Rs. 2.00 Crores Pre-Deposit, Waives Balance During Appeal

The Tribunal directed the appellant to make a pre-deposit of Rs. 2.00 Crores within eight weeks, with the balance demand waived during the appeal's pendency. The decision aimed to strike a balance between the parties' contentions, ensuring compliance without causing undue hardship to the appellant, considering legal precedents and the need to protect the Revenue's interest.

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Issues involved: Service tax demand, appropriation of amount, free supply of materials, works contract, value of goods supplied by contractee, Notification No.15/04-ST, Notification No.18/05-ST, pre-deposit requirement, waiver of balance demand.

Service tax demand and appropriation: The petitioner contested a service tax demand of Rs. 10,62,65,767, with an amount of Rs. 2,83,91,383 ordered for appropriation. The petitioner argued that an additional amount of Rs. 1,20,98,505 had not been considered for appropriation, emphasizing the significant deposit made to protect the Revenue's interest.

Free supply of materials and works contract: The demand comprised two parts - free supply of materials and works contract. The petitioner claimed that the demand related to free supply of materials should be around Rs. 9.00 Crores, while the rest pertained to works contract. The High Court had stayed proceedings regarding free supply of materials, leading the petitioner to request a waiver of further deposit during the appeal's pendency.

Value of goods supplied by contractee: The Revenue contended that the value of goods supplied by the contractee should be included in the gross value of taxable service, citing a Tribunal decision. Despite the petitioner's plea for concession, the Revenue insisted on the discharge of the entire service tax liability.

Notification interpretation and pre-deposit requirement: The Adjudicating Authority examined Notification No.15/04-ST and Notification No.18/05-ST to include the value of materials supplied by the contractee. Considering the Revenue's success in a cited case and the pending High Court proceedings, the Tribunal directed the appellant to make a pre-deposit of Rs. 2.00 Crores within eight weeks, with the balance demand waived during the appeal's pendency.

Interim modality and undue hardship consideration: The Tribunal's decision on the pre-deposit requirement was influenced by legal precedents and the need to protect the Revenue's interest. The order aimed to strike a balance between the parties' contentions, ensuring compliance while not causing undue hardship to the appellant. The decision was made based on a holistic assessment of the case's facts and circumstances.

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