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of <h1>Waiver granted for Service Tax pre-deposit; Deposit 30 lakhs within 8 weeks for Port Services</h1> The judgment addressed an application for waiver of pre-deposit of Service tax, penalties under Sec.78 and Sec. 77 of the Finance Act, 1994, amounting to ... - Issues involved: Application for waiver of pre-deposit of Service tax, penalty under Sec.78, and penalty under Sec. 77 of the Finance Act, 1994. Interpretation of whether the applicants are considered as 'other port' under the Indian Ports Act, 1908. Determination of limitation period for the demand.The judgment addressed the application for waiver of pre-deposit of Service tax amounting to &8377; 1,80,23,306/- along with penalties under Sec.78 and Sec. 77 of the Finance Act, 1994. The demand was confirmed based on the contention that the applicants were providing Port Services falling under the definition of services rendered by a Port or other port in relation to vessels or goods, specifically hiring barges, tugs, and floating cranes. The issue of whether the applicants qualify as 'other port' and the services provided by them were subject to Service tax formed a crucial aspect of the case.Regarding the aspect of limitation, the period of demand ranged from 1-7-2003 to 31-3-2006, with the show cause notice issued on 8-6-2006. The applicants argued that part of the demand was barred by limitation, amounting to &8377; 71 lakhs falling within the normal limitation period. They contended that they were not correctly classified as 'other port' as determined by the Commissioner, asserting that they were under the Revdanda Port, a port under the Rajpuri Group of Ports. Additionally, they claimed that even if considered as 'other port,' they did not provide services in relation to vessels or goods, seeking a waiver of pre-deposit for both Service tax and penalties.The Commissioner's finding on limitation highlighted that the applicants failed to disclose income received from hiring charges of barges, tugs, etc., indicating suppression. It was affirmed that the hiring of tugs and barges constituted services falling within the scope of other port services related to vessels and goods. Consequently, the demand for the entire Service tax amount and penalties was upheld, emphasizing the applicants' obligation to make the requisite deposits.The judgment acknowledged that no prima facie case for total waiver was established by the applicants concerning their classification as 'other port' and the nature of services provided. However, considering the plea of limitation, it was noted that CERA audit objections raised from December 2004 onwards indicated that the services rendered fell under port services liable to Service tax. The court directed the applicants to deposit &8377; 30 lakhs towards Service tax within eight weeks, with the waiver of pre-deposit for the remaining amount and penalties, pending the appeal. Failure to comply would lead to the vacation of stay and dismissal of the appeal without prior notice.The judgment concluded by setting a deadline for compliance reporting on 28-8-2007, emphasizing the importance of adhering to the directed deposit requirements to maintain the stay on recovery pending the appeal process.
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