Is stay or payment of demand is must before the appeal is heard/ decided.

[JainPal Jain]

Pl. enlighten me about the stay in service tax appeal proceedings. Is stay or payment of demand is must before the appeal is heard/ decided.

[Baalu Radhakrishna]

Yes a decision has to be taken on stay matter before the appeal is heard. PAYMENT IS NOT A MUST but such stay order is a must before the appeal is heard. Generally stay is granted if the appeal is on sound grounds or else a portion of tax demanded shall be ordered to be pre-deposited as a pre-condition at the time of hearing the stay petition. It may wary depending on the matter involved in the case. Even if the Revenue has a strong case, if the appellants financial position is in bad shape, stay can be granted by waiving partly the demand and penalties imposed.

[Rama Krishana]

AS per the provisions, you can not file any appeal before the appellate authority before deposit of amount of tax, interest or penalty confirmed in the order in original against which an appeal is intended to be submitted. Therefore, if you wish that your appeal may be admitted without deposit of demand of tax, duty, interest or penalty etc. you need to make an application alongwith the appeal. Before deciding the appeal, the appellant authority decide the application which is called an application for stay or waiver of pre-deposit and on the basis of merit of the case or other factors, the authority may grant stay or waive the deposit partly or fully. Please note that procedure in respect of service tax central excise are not as same as in Income Tax.

AI Summary

Stay in service tax appeals: appellate authority must decide stay or pre deposit waiver applications before hearing the appeal. A decision on a stay or waiver of the pre deposit must be taken before a service tax appeal is heard; payment of the demand is not an absolute prerequisite. The appellate authority considers an application for stay or waiver and may grant full or partial relief based on the merits, other relevant factors and the appellant's financial position, or require a portion of the tax as pre deposit where the appeal is weak. Procedure differs from income tax appeals.