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of <h1>High Court exempts petitioner from service tax deposit, ensures fair hearing</h1> <h3>Bharat Hotels Limited Versus The Commissioner Central Excise, Customs And Service Tax</h3> The High Court found that the petitioner had a prima facie case regarding the service tax category and the credit for the deposited amount. Consequently, ... Pre-deposit - Refusal to give credit for Service Tax already deposited - classification - Service provided by Petitioner is “Transportation of Passengers by Air Services” - Department contends that Petitioner provides services of “Supply of Tangible Goods for use” - Tribunal refused to give credit for the deposit made under Section 35 of the Central Excise Act, 1944 on the ground of submissions made under different category – Held That:- petitioner has a prima facie case - Respondents ought to give the petitioner credit for the service tax amount – petitioner need not deposit 7.5% in the category of “Supply of Tangible Goods for use” and that its appeal shall not be rejected by the Tribunal on the ground that the petitioner has not deposited the amount in the said category. Issues involved:Interpretation of service category for taxation purposes; Credit for service tax deposit; Applicability of Section 35 of the Central Excise Act, 1944; Tribunal's refusal to give credit; Prima facie case determination.Interpretation of service category for taxation purposes:The petitioner claims to provide 'Transportation of Passengers by Air Services,' while the department argues it falls under 'Supply of Tangible Goods for use.' The issue at hand is to determine the correct category, which is pending adjudication. The petitioner has already paid &8377; 1,04,96,924/- as service tax under the 'Transportation of Passengers by Air Services' category. The High Court acknowledges that it is crucial to ascertain the relevant service category for taxation purposes.Credit for service tax deposit and Section 35 of the Central Excise Act, 1944:The Tribunal denied the petitioner credit for the tax deposit under Section 35 of the Central Excise Act, 1944, stating that the tax was paid for a different category than the one for which the department raised a demand. The petitioner's counsel argues that the appropriate category needs to be determined, emphasizing the importance of giving credit for the deposited amount. The High Court notes the Tribunal's decision and the petitioner's contention regarding the credit issue.Prima facie case determination and Tribunal's directive:The High Court finds that the petitioner has a prima facie case regarding the service tax category and the credit for the deposited amount. Consequently, the Court issues a notice directing that the petitioner is not required to deposit 7.5% under the 'Supply of Tangible Goods for use' category. Additionally, the Tribunal is instructed not to reject the petitioner's appeal based on the non-deposit in the said category. The notice is returnable on 18.01.2016, indicating a further hearing on the matter. The High Court's decision aims to ensure fairness and procedural correctness in the ongoing dispute between the petitioner and the tax department.
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