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of <h1>Tribunal orders Rs. 2,50,000 deposit for tax appeal, warns of consequences for non-compliance.</h1> <h3>SUPER SPRINGS PVT. LTD. Versus COMMR. OF C. EX. & SERVICE TAX, COIMBATORE</h3> The Tribunal found the issues contentious and directed the applicants to deposit Rs. 2,50,000 towards tax within 8 weeks. Upon this pre-deposit, the ... Notification No. 8/2005-S.T., dated 1-3-2005- Business Auxiliary Service- whether the assessees are required to pay Service tax under the Heading ‘Business Auxiliary Service’ (BSA) during the period 10-9-2004 to 28-2-2005, and whether the benefit of exemption in terms of Notification No. 8/2005-S.T., dated 1-3-2005 in respect of the job work done for their clients during period March and April, 2005 and March and April, 2007 is available. Held that- the conditions of notification not fulfilled by the assessee thus direct him to deposit a sum of Rs. 2,50,000/-. Issues:1. Liability to pay Service tax under 'Business Auxiliary Service' (BAS) from 10-9-2004 to 28-2-2005.2. Eligibility for exemption under Notification No. 8/2005-S.T. for job work done during March and April of 2005 and 2007.Issue 1: Liability to pay Service tax under 'Business Auxiliary Service' (BAS) from 10-9-2004 to 28-2-2005:The assessees argued that their activities such as shearing, burr removing, welding, etc., did not amount to manufacturing goods, thus not falling under BAS for Service tax liability. They contended that prior to 16-6-2005, processing of goods did not attract service tax under BAS. They claimed that the processing of goods during the mentioned period should not attract Service tax. Regarding the eligibility under Notification No. 8/2005-S.T., the assessees fulfilled the conditions by not manufacturing goods and returning the goods to the client for further manufacturing. The Revenue opposed the waiver, stating that the assessees were indeed involved in production not amounting to manufacture, making them liable for Service tax. They argued that the benefit of Notification No. 8/2005 was not applicable as the goods were returned to a 100% EOU under an exemption from excise duty.Issue 2: Eligibility for exemption under Notification No. 8/2005-S.T. for job work done during March and April of 2005 and 2007:The assessees claimed eligibility for exemption under Notification No. 8/2005-S.T. for the job work done during March and April of 2005 and 2007. They fulfilled the conditions of the notification by not manufacturing goods and returning the goods to the client for further manufacturing. However, the Revenue contended that the benefit of the notification was not available as the goods were returned to a 100% EOU under an exemption from excise duty, which did not include 'nil rate' or 'duty of excise wholly exempt.'In the judgment, the Tribunal found the issues in dispute to be contentious, and no prima facie case for total waiver was established by the applicants. Consequently, the Tribunal directed the applicants to deposit a sum of Rs. 2,50,000 towards the tax within 8 weeks. Upon this pre-deposit, the balance amounts were dispensed with, and recovery thereof was stayed during the pendency of the appeals. Failure to comply with this direction would result in the vacation of stay and dismissal of the appeals. Compliance was required to be reported by a specified date.
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