Appeal allowed for pre-2006 issues, remand for post-2006 matters. Fresh adjudication ordered.

The appeal was allowed in favor of the appellant regarding the demand, recovery of interest, and penalties for the period before 18-4-2006. The prior demands were set aside, and penalties vacated based on settled issues. However, for the period post-April 2006, a readjudication was ordered by the Commissioner. The matter was remanded to the adjudicating authority for fresh adjudication on similar issues post-April 2006, emphasizing reconsideration of all contentions raised by the appellant. The stay petition was also disposed of accordingly.

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Issues involved:
Waiver and stay of adjudged dues including Service Tax and education cesses, penalty under Section 78 of the Finance Act, 1994 for the period from January 2005 to March 2007.

Detailed Analysis:

1. Waiver and Stay of Adjudged Dues:
The appellant sought waiver and stay of the adjudged dues, including Service Tax and education cesses, along with a penalty imposed under Section 78 of the Finance Act, 1994. The demand was related to Business Auxiliary Service (BAS) under the reverse charge mechanism. The appellant's argument that no Service Tax on BAS received from abroad was applicable before 18-4-2006 was not accepted initially. However, considering the judgment of the Bombay High Court and the subsequent acceptance by the C.B.E. & C., a prima facie case was found in favor of the appellant against a major part of the demand. After dispensing with pre-deposit, the appeal was dealt with due to the non-application of mind by the adjudicating authority to a crucial plea made by the appellant.

2. Crucial Aspects of the Impugned Adjudication:
a. The appellant's plea based on the Bombay High Court's decision regarding the non-leviability of Service Tax on taxable services received from abroad before 18-4-2006 was not considered by the adjudicating authority, who relied on certain circulars of the Board.
b. The appellant contended that some transactions with foreign companies post-April 2006 did not involve BAS import but were sale and purchase of iron ore pellets. The commission described in agreements was actually discounts to foreign buyers, not liable for Service Tax under BAS. The impugned order did not reflect consideration of this plea by the adjudicating authority.

3. Acknowledgment and Remand for Reconsideration:
The Commissioner acknowledged the acceptance of the Bombay High Court's judgment by the C.B.E. & C. but no findings were recorded on the appellant's plea regarding transactions post-April 2006. The matter was remanded to the adjudicating authority for a fresh decision on liability for Service Tax with education cesses on payments to foreign companies post-April 2006, emphasizing reconsideration of all contentions raised by the appellant.

4. Decision and Set Aside of Prior Demands:
For the period before 18-4-2006, the demand against the appellant was set aside, and penalties vacated based on settled issues in favor of the appellant by previous judgments. However, for the period post-April 2006, a readjudication was ordered by the Commissioner in line with legal requirements and principles of natural justice.

5. Final Verdict and Disposal:
The appeal was allowed concerning the demand, recovery of interest, and penalties for the period before 18-4-2006. The matter was remanded to the adjudicating authority for fresh adjudication on similar issues post-April 2006. The stay petition was also disposed of accordingly.

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