2014 (2) TMI 241 - AT - Service Tax

Tribunal grants waiver & stay, overturns exemption denial, ensures tax law fairness

The Tribunal granted the appellant-assessee's application for waiver of pre-deposit and stay of recovery of service tax, interest, and penalties. The ... Waiver of pre-deposit - Stay of recovery of service tax - Denial of benefit of Notification No. 12/2003-ST - goods/ material in issue were consumed in the taxable service of repair of transformers - Held that:- since this Tribunal in identical circumstances had granted absolute waiver of pre-deposit and unconditional stay, we also grant waiver of pre-deposit and stay of all further proceedings pursuant to the impugned order in original, pending disposal of the appeal - Following decision of Aggarwal Colour Advance Photo System vs. CCE, Bhopal [2011 (8) TMI 291 - CESTAT, NEW DELHI (LB)] - Stay granted. Issues involved: 1. Waiver of pre-deposit and stay of recovery of service tax, interest, and penalties 2. Denial of exemption claim under Notification No. 12/2003-ST 3. Interpretation of taxable service of repair of transformers under Finance Act, 1994 4. Comparison with a previous Tribunal decision in Samtech Industries 5. Revenue's arguable case based on a precedent ---The judgment addresses the application seeking waiver of pre-deposit and stay of recovery of service tax, interest, and penalties as assessed by the adjudication order. The appellant-assessee's claim for exemption under Notification No. 12/2003-ST was denied, which exempted the value of goods and material sold by a service provider to a recipient of service from the levy of service tax, subject to specific documentary proof indicating the value of the goods and material. The denial was based on the argument that the goods/material were consumed in the taxable service of repair of transformers, as defined under Section 65(64) read with Section 65(105)(zzg) of the Finance Act, 1994. Notably, in a similar case involving Samtech Industries, this Tribunal had previously granted unconditional stay.The Learned Departmental Representative (DR) argued that the Revenue had a valid case to support the adjudication order, citing the decision in Aggarwal Colour Advance Photo System vs. CCE, Bhopal. However, considering the Tribunal's previous decision to grant absolute waiver of pre-deposit and unconditional stay in identical circumstances, the current Tribunal also decided to grant waiver of pre-deposit and stay of all further proceedings pending the appeal's disposal.The Tribunal disposed of the stay application accordingly, emphasizing the importance of consistency with past decisions and the need to provide relief to the appellant in line with previous rulings. The judgment reflects a balanced approach in considering the exemption claim, the interpretation of relevant provisions of the Finance Act, and the precedents set by the Tribunal in similar cases, ensuring fairness and equity in the application of tax laws.