Tribunal waives balance dues upon deposit of Rs. 11.16 lakhs, stays recovery during appeal

The Tribunal found merit in the applicant's claim regarding a portion of the Service Tax demand, directing them to deposit the balance amount of Rs. 11.16 lakhs within six weeks. Upon compliance, the balance dues would be waived, and recovery stayed during the appeal's pendency, with a deadline set for 24.07.2014.

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Issues: Application for waiver of pre-deposit of Service Tax and penalty under Section 78 of the Finance Act, 1994.

Analysis:
1. The applicant sought a waiver of pre-deposit of Service Tax amounting to Rs. 50.37 lakhs and an equal penalty under Section 78 of the Finance Act, 1994. The applicant claimed that a significant portion of the demand related to services rendered in partnership with a consortium partner, who had already paid the Service Tax. Additionally, the applicant highlighted discrepancies in the amount received from principal contractors and the Service Tax discharged. The applicant argued that they were not obligated to pay the Service Tax until receiving full payment from the principal contractors.

2. The Revenue, represented by the Ld.A.R., contested the applicant's claims and reiterated the findings of the Ld.Commissioner. The Revenue argued that the applicant failed to provide sufficient evidence that the consortium partner had indeed paid the Service Tax on the taxable value of services rendered. While acknowledging the Chartered Accountant's Certificate presented by the applicant, the Revenue asserted that further scrutiny was necessary. Regarding services rendered as a subcontractor, the Revenue pointed out that although the applicant had received payments that included Service Tax amounts, they had not discharged the corresponding Service Tax liability.

3. After hearing both sides and examining the records, the Tribunal found merit in the applicant's claim regarding a portion of the demand amounting to Rs. 38.75 lakhs. The Tribunal noted that the applicant successfully demonstrated, with the Chartered Accountant's Certificate, that the consortium partner had paid the Service Tax for this specific amount. However, concerning the remaining balance of Rs. 11.62 lakhs, the Tribunal rejected the applicant's argument that they were not obligated to pay the Service Tax until receiving full payments from the principal contractors. The Tribunal agreed with the Revenue that the Service Tax component was likely included in the payments already received by the applicant from the principal contractors.

4. Consequently, the Tribunal directed the applicant to deposit the balance amount of Rs. 11.16 lakhs within six weeks. Upon this deposit, the balance dues would be waived, and the recovery stayed during the appeal's pendency. Failure to comply with this directive would lead to the dismissal of the appeal without further notice. The compliance deadline was set for 24.07.2014.

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