Petitioner Ordered to Deposit Rs. 50.00 Lakhs to Resolve Dispute

The Tribunal directed the petitioner to deposit Rs. 50.00 Lakhs within eight weeks to resolve the dispute regarding the payment of Rs. 82,82,956/-, considering the interest of Revenue and justice. Failure to comply would result in the dismissal of the appeal without further notice.

---

---

Issues: Application for waiver of pre-deposit of service tax and penalty under Rule 15 (3) of CENVAT Credit Rules, 2004.

Analysis:
1. The petitioner sought waiver of pre-deposit of service tax amounting to Rs. 10.73 Crores and an equal penalty imposed under Rule 15 (3) of CENVAT Credit Rules, 2004. The petitioner had already deposited Rs. 1.00 Crore, interest of Rs. 16.27 Lakhs, and penalty of Rs. 3.72 Lakhs against the confirmed demand. The main contention was that the deposited amount should be considered sufficient for hearing their appeal.

2. The Revenue argued that despite the petitioner claiming to have reversed/paid Rs. 82,82,956/- towards their liability under Rule 6(3) of CENVAT Credit Rules, 2004, it was shown in both the original and revised ST-3 Returns as payment towards their routine Service Tax liability. The original relevant portion of the service Tax Return was presented as evidence to support this claim.

3. In response, the petitioner contended that upon recalculation of the alleged service tax liability, the amount was reduced from Rs. 136.00 crores to Rs. 134.00 crores. They provided a reconciliation statement along with the revised service tax return, asserting that there was no double entry concerning the payment of Rs. 82,82,956/-.

4. After hearing both sides and examining the records, the Tribunal observed that the dispute revolved around whether the amount of Rs. 82,82,956/- was paid towards routine service tax liability or as a reversal of CENVAT Credit. The CENVAT Credit statement indicated that the amount was shown as proportionate cenvat credit used in providing exempted services. The Tribunal noted discrepancies in the petitioner's claims and directed them to deposit Rs. 50.00 Lakhs within eight weeks, considering the interest of Revenue and justice. Failure to comply would result in the dismissal of the appeal without further notice.

---