2012 (12) TMI 275 - AT - Service Tax

Appellant granted stay, remand for fresh decision on Service Tax waiver appeal.

The appellant filed for a waiver of pre-deposit of Service Tax, interest, and penalty. The appeal was dismissed for non-compliance with the stay order ... Supply of tangible goods service - definition of taxable service in relation to supply of tangible goods including machinery, equipment and appliances - waiver of pre-deposit - pre-deposit under Section 35F of the Central Excise Act, 1944 - remand for fresh consideration after affording opportunity of hearingSupply of tangible goods service - definition of taxable service in relation to supply of tangible goods including machinery, equipment and appliances - Giving bullock-carts on hire amounts to supply of tangible goods service was examined and the appellants made out a prima facie case that bullock-carts are not machinery, equipment or appliances. - HELD THAT: - The Tribunal considered the statutory definition of taxable service as including services in relation to supply of tangible goods comprising machinery, equipment and appliances for use without transfer of possession and effective control. Applying that definition, the Tribunal observed that bullock-carts prima facie do not fall within the categories of machinery, equipment or appliances contemplated by the provision. On that basis, the applicants established a prima facie case that the impugned demand may not be sustainable insofar as it treats the hire of bullock-carts as the taxable service in question. The Tribunal did not finally decide the merits of the appeal on this point but recorded this conclusion for the limited purpose of the pre-deposit application and adjudicatory guidance on remand. [Paras 6]The Tribunal found that bullock-carts prima facie cannot be regarded as machinery, equipment or appliances for the purpose of the tangible goods service definition and thus the appellants made out a case for relief on that legal question.Waiver of pre-deposit - pre-deposit under Section 35F of the Central Excise Act, 1944 - remand for fresh consideration after affording opportunity of hearing - Application for waiver of pre-deposit was allowed and the appeal was remanded to the Commissioner (Appeals) for fresh adjudication after hearing. - HELD THAT: - The Tribunal allowed the stay petition and granted total waiver of the pre-deposit requirement for the hearing of the appeal, relying on its prima facie conclusion that bullock-carts do not fall within the statutory categories forming the taxable tangible goods service. Noting that the Commissioner (Appeals) had not decided the appeal on merits and that the appellant's non-compliance with the earlier stay condition led to dismissal under Section 35F, the Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) to decide the appeal afresh after affording the appellant an opportunity of hearing. [Paras 7, 8, 9]Stay petition allowed; pre-deposit waived and the impugned order set aside with remand to the Commissioner (Appeals) to decide the appeal afresh after hearing.Final Conclusion: The Tribunal allowed the application for waiver of pre-deposit, observed that bullock-carts prima facie do not constitute machinery, equipment or appliances under the tangible goods service definition, set aside the impugned order and remanded the appeal to the Commissioner (Appeals) for fresh adjudication after affording the appellant an opportunity of hearing. Issues:1. Application for waiver of pre-deposit of Service Tax2. Interpretation of the definition of taxable service under Section 65 of the Finance Act, 19943. Whether giving bullock-carts on consideration amounts to supply of tangible goods serviceAnalysis:1. The appellant filed an application for waiver of pre-deposit of Service Tax, interest, and penalty. The adjudicating authority confirmed the demand under the category of supply of tangible goods. The Commissioner (Appeals) directed the appellant to deposit a certain amount for the hearing of the appeal. However, as the appellant did not comply with the stay order condition, the appeal was dismissed for non-compliance of the provisions of Section 35F of the Central Excise Act, 1944.2. The applicant contended that as per Section 65 of the Finance Act, 1994, taxable service includes services provided in relation to the supply of tangible goods. The appellant argued that they are engaged in the manufacture of sugar and molasses and only supplied bullock-carts to a Seva Sangh for transporting sugarcane to the factory. The appellant claimed that bullock-carts cannot be considered machinery, equipment, or appliances, and therefore, they are not liable to pay service tax under the supply of tangible goods service.3. The Revenue argued that since the appellant had given the bullock-carts on hire, they are covered by the taxable service. The issue revolved around whether giving bullock-carts on consideration amounts to the supply of tangible goods service. The definition of tangible goods service includes machinery, equipment, and appliances. However, bullock-carts may not fall under these categories. The Tribunal found that the appellant had made a case for a total waiver for the hearing of the appeal.4. The Tribunal allowed the stay petition and set aside the Commissioner (Appeals) order as it was not decided on merits. The matter was remanded to the Commissioner (Appeals) to decide afresh on merits after giving an opportunity of hearing to the appellant. The appeal was allowed by way of remand.