Appellant must predeposit Rs.3 lakhs within 6 weeks; full waiver possible.

The Tribunal directed the appellant to predeposit Rs.3 lakhs within six weeks, considering financial hardships due to stoppage of payments by BHEL. Compliance would lead to a waiver of predeposit and stay of recovery for the balance dues totaling Rs.54,50,129 demanded for service tax and education cesses from 2006-07 to 2010-11. The demand was based on services provided to BHEL, with discrepancies in payments received and confessional statements supporting the 'manpower recruitment and supply' service demand.

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Issues:
1. Demand of service tax and education cesses totaling to Rs.54,50,129 for the period from 2006-07 to 2010-11.
2. Discrepancy in the amount received by the appellant from M/s. Bharat Heavy Electricals Ltd. (BHEL) as per Form 26AS and data provided by BHEL.
3. Nature of services provided by the appellant to BHEL under various categories.
4. Demand under 'manpower recruitment and supply' service based on confessional statement of the appellant.
5. Plea of limitation raised by the appellant.
6. Financial hardships faced by the appellant due to stoppage of payments by BHEL.
7. Predeposit amount and stay of recovery.

Analysis:

1. The appeal and application filed by the appellant sought waiver and stay against the demand of service tax and education cesses totaling to Rs.54,50,129 for the period from 2006-07 to 2010-11. The Department based the demand on services provided by the appellant to BHEL, using data from Form 26AS and information from BHEL regarding payments made. The Department identified the nature of services provided by the appellant to BHEL through agreements and categorized the demand into services like BAS, cleaning service, maintenance, repair service, and 'manpower recruitment and supply' service.

2. There was a discrepancy in the amount received by the appellant from BHEL as per Form 26AS and data provided by BHEL directly. The Department found agreements between the appellant and BHEL for some payments, while large payments were received without agreements. The demand under 'manpower recruitment and supply' service was based on a confessional statement of the appellant regarding receiving payments for the supply of labor without agreements.

3. The Tribunal observed that the demand of service tax amounting to Rs.31.4 lakhs was based on payments received from BHEL under agreements, where the nature of services was clear. However, for the rest of the demand over Rs.23 lakhs, no written agreements were available to identify the nature of service accurately. The confessional statement of the appellant regarding payments for the supply of labor without agreements supported the demand under 'manpower recruitment and supply' service.

4. The appellant raised a plea of limitation, and financial hardships were highlighted due to the stoppage of payments by BHEL. The Department had requested BHEL to stop payments to the appellant or divert them to the service tax account. The Tribunal directed the appellant to predeposit an amount of Rs.3 lakhs within six weeks, considering the financial situation and the request made to BHEL to stop payments. Compliance with the predeposit would lead to a waiver of predeposit and stay of recovery for the balance dues.

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