Tribunal waives dues, stays recovery, and remands for fresh decision on appeal deposit requirement.

The Tribunal directed the appellants to deposit Rs.50 lakhs for hearing the appeals within eight weeks, with remaining dues waived and recovery stayed during the appeal. The impugned orders were set aside, and the matter was remanded for a fresh decision with the requirement to provide proof of the directed deposit and ensure both parties had the opportunity to present evidence.

---

---

Issues:
1. Waiver of pre-deposit of service tax amount.
2. Taxability of Design Service provided.
3. Violation of principles of natural justice.
4. Evidence of cost of design and drawing added to assessable value.
5. Separate invoices for design charges.
6. Definition of Design Service under Finance Act.
7. Deposit of Rs.50 lakhs for hearing of appeals.
8. Opportunity to produce evidence before the adjudicating authority.

Analysis:

1. The appellants sought waiver of pre-deposit of service tax amounting to Rs. 3,85,06,982, interest, and penalty. The demand was confirmed due to the provision of Design Service taxable under the Finance Act, which the appellants had not paid.

2. The appellants argued that the cost of design and drawing was already included in the assessable value of the goods manufactured, and appropriate duty had been paid. They contended that the demand of service tax for design was not sustainable.

3. Allegations were made that the impugned order violated the principles of natural justice as the adjudicating authority did not grant an opportunity to produce relevant records. The appellants claimed to have evidence showing the inclusion of design costs in the assessable value, which was not considered during the order.

4. The Revenue argued that separate invoices for design charges were raised, indicating consideration received separately for design services. They claimed that as per the Finance Act, Design Service related to industrial products was liable for service tax unless evidence showed the inclusion of design costs in the assessable value.

5. The definition of Design Service under section 65(36b) of the Finance Act included services related to designing industrial products. The appellants were found to charge customers separately for design services based on invoices.

6. Following discussions, the appellants agreed to deposit Rs.50 lakhs for hearing the appeals. The Tribunal directed the deposit within eight weeks, with the remaining dues waived and recovery stayed during the appeal.

7. The appellants had requested the adjudicating authority for an opportunity to present evidence regarding the inclusion of design costs in the assessable value, which was not considered. Consequently, the impugned orders were set aside, and the matter was remanded for a fresh decision with the requirement to provide proof of the directed deposit and ensure both parties had the opportunity to present evidence.

---