CESTAT directs railway service providers to make pre-deposits for service tax appeal The Appellate Tribunal CESTAT NEW DELHI directed two appellants involved in providing services related to railways to make pre-deposits of calculated ...
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CESTAT directs railway service providers to make pre-deposits for service tax appeal
The Appellate Tribunal CESTAT NEW DELHI directed two appellants involved in providing services related to railways to make pre-deposits of calculated service tax amounts within eight weeks. The specific amounts were set at Rs. 5.62 lakhs for one appellant and Rs. 3.14 lakhs for the other. Compliance was required by a specified date, and upon compliance, recovery of remaining liabilities was stayed during the appeal. Failure to make the pre-deposit would result in the appeal being dismissed for non-compliance with the tribunal's order.
Issues: 1. Application for waiver of pre-deposit of service tax demand in the category of "Commissioning, Installation and Erection Services."
Analysis:
The judgment by the Appellate Tribunal CESTAT NEW DELHI involved a case where the appellants sought a waiver of pre-deposit of service tax demand in the category of "Commissioning, Installation and Erection Services." The appellants provided various services related to railways, and the demand for service tax was contested based on the deduction of the cost of materials supplied. The appellants argued that the demand would significantly reduce if the cost of materials was considered. They also claimed that the services provided to Railways were exempted from the levy of service tax. The appellants calculated that with a service tax rate of 12.36%, the demand for one appellant would reduce to Rs. 5.62 lakhs and for the other to Rs. 3.14 lakhs.
The tribunal, without delving into other contentions raised by the appellants, directed both appellants to make pre-deposits of the calculated service tax amounts within eight weeks. The specific amounts were set at Rs. 5.62 lakhs for one appellant and Rs. 3.14 lakhs for the other. Compliance was to be reported by a specified date, and on such compliance, the recovery of the remaining adjudicated liabilities was stayed during the pendency of the appeal. However, in case of default in making the pre-deposit, the appeal would stand dismissed for failure to comply with the tribunal's order.
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