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of <h1>High Court affirms Tribunal's order on service tax deposit for Business Auxiliary Services</h1> The Bombay High Court upheld the Customs, Excise & Service Tax Appellate Tribunal's decision directing the appellant to deposit 25% of the service tax ... Waiver of pre-deposit - Business Auxiliary Services - application was partly allowed by directing the Appellant to deposit 25% of the amount demanded - Held that:- Tribunal observed that certain processes on the material supplied by the Ship-builder are required to be carried out by the appellant at his works as per work terms and conditions of the contract. Whether factually this has been done or not is a matter which is required to be decided on the basis of material placed before the learned Tribunal. However, it cannot be said that the observation made by the learned Tribunal is not on the basis of the document which is not part of the record. The learned Tribunal found some substance in the case of the appellant and has directed him to deposit only 25% of the demand and not the entire 100% amount. It can thus be clearly seen that the learned Tribunal has taken into consideration the factors i.e. prima facie case and the interest of the Revenue. - if the amount is deposited within a period of 8 weeks, the learned Tribunal to decide the appeal on its own merits. - Time limit to comply with the pre-deposit extended - Decided partly in favor of assessee. Issues:1. Challenge to order directing deposit of service tax amount.2. Appeal for waiver of pre-deposit and alleged discriminatory treatment.3. Consideration of factors for waiver of pre-deposit.4. Examination of Tribunal's decision on deposit amount and undue hardship.Analysis:The judgment by the Bombay High Court dealt with an appeal challenging an order by the Customs, Excise & Service Tax Appellate Tribunal directing the appellant to deposit 25% of the service tax amount. The appellant was issued a notice regarding liability for service tax for 'Business Auxiliary Services,' leading to an appeal and a request for waiver of pre-deposit. The appellant argued that they should not be required to deposit any amount, claiming their activities did not fall under service tax as they were part of manufacturing activities. The respondent contended that the appeal was based on an interlocutory order and discretion of the Tribunal should not be interfered with unless exercised perversely. The Court cited the need to consider prima facie case, undue hardship, and the interest of Revenue when deciding on waiver of pre-deposit, referring to the Benara Valves Ltd case.The Court analyzed the Tribunal's decision, noting that the terms of the Agreement and the work carried out were considered. The Tribunal found that processes on material supplied by the Ship-builder were required to be carried out by the appellant, based on the contract's terms and conditions. The Court found that the Tribunal's decision was not perverse as it was based on the document submitted. The Tribunal had directed the appellant to deposit only 25% of the demanded amount, considering the prima facie case and the Revenue's interest. However, the Court observed that the issue of undue hardship was not pressed before the Tribunal, so a finding on that aspect was not expected.Ultimately, the Court found no grounds for interference and concluded that no substantial question of law arose for consideration. The appellant was granted 8 weeks to deposit the amount as directed by the Tribunal, with a directive for the Tribunal to decide the appeal on its merits if the amount was deposited within the stipulated time frame.
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