Appeal restored with COD clearance. Appellants seek waiver of pre-deposit for service tax. Tribunal directs Rs. 1 Crore pre-deposit.

The appeal was restored after producing the required COD clearance. The appellants sought a waiver of pre-deposit for service tax, penalty, and interest, totaling Rs. 2,54,85,594. The demand was confirmed due to failure to deposit service tax collected from customers. The appellants claimed they paid the service tax but lacked evidence. The Tribunal directed a pre-deposit of Rs. 1 Crore within eight weeks, with remaining amounts waived for the appeal hearing. Recovery was stayed pending appeal, with compliance reporting scheduled for 3rd August 2009.

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Issues:
1. Restoration of appeal dismissed for want of COD clearance.
2. Waiver of pre-deposit of service tax, penalty, and interest.
3. Contention regarding recovery of service tax and applicability of Notification 3/94-S.T.
4. Lack of evidence of service tax collection and deposit with revenue.
5. Liability for interest due to late deposit of service tax.

Analysis:

1. The judgment addresses the issue of restoration of an appeal that was initially dismissed due to the lack of COD clearance. The appellants applied for restoration after producing the necessary clearance. The Order dismissing the appeal was recalled, and both the appeal and the stay petition were restored to their original numbers. The stay petition was taken up for immediate hearing with the consent of both parties.

2. The appellants sought a waiver of pre-deposit of a substantial amount of service tax, penalty, and interest totaling Rs. 2,54,85,594.00. The demand was confirmed as the appellants were alleged to have recovered the service tax from customers but failed to deposit it with the revenue. Additionally, interest was levied for late deposits of other service tax amounts.

3. The appellants contended that they had indeed recovered the service tax and paid it to the revenue department, making the demand unsustainable. They argued that certain categories of services, such as public telephones for local calls, were not liable for service tax as per Notification 3/94-S.T. The appellants claimed that this benefit was not considered in the calculation of service tax, but no financial hardship was proven.

4. The revenue's position was that the appellants did not provide evidence of the service tax collected and deposited with the revenue. The adjudicating authority found no documentary evidence supporting the appellants' claims. Therefore, the demand was deemed valid. Regarding interest, it was argued that late deposits of service tax made the appellants liable for interest.

5. The Tribunal found that while the appellants admitted to collecting service tax from customers, they failed to provide evidence of depositing it with the revenue. The Tribunal also noted that the late payment of service tax, unrelated to the present case, made the appellants liable for interest. Consequently, the Tribunal directed the appellants to pre-deposit Rs. 1 Crore within eight weeks. Upon compliance, the remaining pre-deposit of service tax, penalty, and interest was waived for the appeal hearing, and recovery was stayed during the appeal's pendency. The matter was scheduled for compliance reporting on 3rd August 2009.

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