2008 (5) TMI 186 - AT - Service Tax

Demand raised on the ground that the applicant had suppressed the fact that they were engaged in the activities of renting cars/cabs and availed the benefit of Notification No. 39/97-S.T. contention of the appellants that they had applied for registration and got Service tax registration under tour operator and were discharging Service tax liability since 1997 is justified no suppression - demand is barred by limitation - prima facie case for waiver of pre-deposit amount involved

Summary

Issues:
- Waiver of pre-deposit of Service tax amount and penalty under Sections 76 and 77 of the Finance Act, 1994.
- Suppression of facts regarding renting cars/cabs and availing benefits of Notification No. 39/97-S.T.
- Bar of limitation on the demand of Service tax.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI involved the issue of waiver of pre-deposit of an amount of Rs. 4,49,021/- and equivalent penalty under Sections 76 and 77 of the Finance Act, 1994. The demand of Service tax arose due to the alleged suppression of facts by the applicant regarding their engagement in renting cars/cabs and availing benefits under Notification No. 39/97-S.T. The applicant contended that they had applied for registration as a tour operator and had been discharging Service tax liability since 1997. The Tribunal noted that the authorised signatory of the applicant had consistently maintained that they hired out cars under the tour operator registration and discharged Service tax liability on those services. It was also observed that the applicant had availed the benefit of Notification during the relevant period.

Furthermore, the Tribunal found merit in the argument put forth by the applicant's counsel that the entire demand was barred by limitation. Considering the submissions and perusing the records, the Tribunal concluded that the applicant had established a prima facie case for the waiver of the pre-deposit amount. Consequently, the application for the waiver of pre-deposit of the amounts involved was allowed, and the recovery of the said amounts was stayed pending the disposal of the appeal. The judgment highlighted the importance of maintaining accurate records and complying with tax obligations while also emphasizing the significance of the limitation period in tax-related matters.