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Service Tax - Case Laws
Showing 81 to 100 of 209 Records
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2014 (7) TMI 788
Demand of service tax - erection, commissioning or installation services - Held that:- Circular of the Board which provides that laying of electric cables upto distribution point of residential or commercial localities/complex is not a taxable service under the category of ‘erection, commissioning or installation’. As such at this stage, appellant has a good prima facie case in its favour so as to allow the stay petition unconditionally - stay granted.
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2014 (7) TMI 787
Waiver of pre deposit - Benefit of concessional rate of service tax @ 2% available under the Works Contract Rules - Availment of option required under sub-rule (3) of Rule 3 - Held that:- though the Applicant claimed to have exercised their option on 12-7-2007, but on a prima facie view, the option would be considered to have been exercised from the date of receipt of the said option by the Department. Thus, prima facie, the Applicant are required to pay service tax without the benefit of Works Contract Rules, till the said option was exercised i.e., on 10-9-2007, when it was received by the Department relating to the ongoing projects. Gross amount received in the month of August, was ₹1,93,77,870 and the amount of service tax payable on the same worked out to be ₹20,51,672 - for the month of September, 2007, there are no details in the Notice of the amount received as on 10-9-2007 and the corresponding service tax short paid. No financial hardship was pleaded - Conditional stay granted.
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2014 (7) TMI 752
Intellectual property rights – transfer of technical knowhow for manufacture of automobile parts - payment of royalty each year – Held that:- This is a case involving transfer of technical knowhow for manufacture of automobile parts. The knowhow transferred was designs, engineering, data, manufacturing and process data, basic machinery and facility lay outs, testing and quality control data, production and testing equipment data including software, drawings, documents and materials relating to the products to be manufactured. So the knowhow by its very nature was not of a type which could be transferred on a continuous basis and was transferred as a onetime activity which happened in the year 2002. No proof that there was continuous transfer of technology during the relevant period namely, has been adduced by Revenue though Revenue is able to demonstrate continued payment of consideration for technology transferred based on the sales turnover of the goods manufactured using the technology already transferred.
Whether tax is payable for consideration received after 10-09-2004 when the taxable event took place before 10-09-2004, the date when the activity became taxable – Held that:- Service tax being on the service rendered the liability has to be determined with reference to the time when activity took place and not with reference to the time when payment is taking place. This is the principle decided Tribunal in the case of Mundipharma Pvt. Ltd vs. CCE-[2009 (4) TMI 113 - CESTAT, NEW DELHI] with reference to the same service – Decided in favour of assessee.
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2014 (7) TMI 750
Denial of CENVAT Credit - Distribution of service tax through ISD - Trading services - Held that:- it is the appellant manufacturer who has taken the credit and therefore, the recovery of wrongly taken credit has to be effected from him. The distribution of service tax through ISD is only a facility provided under the Rules and does not deal with recovery. Therefore, the credit, if taken wrongly, has to be recovered from the person who has taken credit.
Whether trading could be considered as an exempted service prior to 1-4-2011 in view of the explanation inserted in Rule 2(e) of CCR, 2004, and if credit is not admissible, what is the methodology that should be adopted for quantification of ineligible input service tax attributable to trading activities - Held that:- categorically that prior to 01/04/2011 trading cannot be considered as an exempted service. In the said decision, it was held categorically that apportionment of input service tax credit on common input services used for trading activity and manufacturing activity could be done based on the ratio of their respective turnover. In view of this decision, we are of the considered view that the demand for reversal of input service tax credit in the present case adopting the ratio of the turnover of trading activity and manufacturing activity, in the impugned order, cannot be faulted.
Waiver of pre deposit - Held that:- when there is no prima facie case and financial hardship is not pleaded, the interest of revenue need to be protected - Conditional stay granted.
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2014 (7) TMI 749
Denial of request of rectification of mistake - recovery of service tax, interest and penalty - construction of commercial and residential complex - assessee was informed that, in the absence of any appeal filed against the Joint Commissioner's Order-in-Original No. 18/2008 dated 26.3.2008 within the time limit of 90 days from the date of receipt of the order prescribed under the Statute and in the absence of any modification of the said order, amounts confirmed as payable therein are liable to be paid by you. - Held that:- the appellant had not disputed any of the issues as stated by the Additional Commissioner in his letter dt. 8.12.2011. So, it is evident that the appellant had not filed appeal against Order-in-Original dated 26.2.2008. - Therefore there is no reason to interfere with the order of Commissioner (Appeals) - Decided against assessee.
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2014 (7) TMI 748
Valuation of the services - maintenance & repair service; erection, commissioning & installation service - service tax paid on 15% value of services and VAT is paid on rest 85% - Held that:- adjudicating authority while deciding the issue, has not considered the submissions made by the appellant and has held that the contracted value has been artificially bifurcated into the material portion and the service portion. It is observed from the clause 25 of the representative contract dt.06.11.2009 entered into between the appellant and M/s Tej Complex, Ahmedabad, that 15% of the contract value represent erection, commissioning and installation services on which VAT / Sales Tax is not paid by the appellant.
As per Rule 2A(ii) of the Service Tax (Determination of Value) Rules 2006, the actual value of transfer of property in goods involved in execution of the works contract is not to be taken into consideration while discharging Service Tax liability under the works contract services. It is the claim of the appellant that VAT/ Sales Tax was paid on the actual material value of the material sold, as per audit account furnished to the adjudicating authority and on examination of the records, it seems to be so. However, this matter whether VAT/ Sales Tax has been paid on the actual materials sold to the service recipient is required to be gone into detail by the adjudicating authority - Matter remanded back - Decided in favour of assessee.
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2014 (7) TMI 747
Tribunal's power to grant Stay beyond 365 days - matter referred to Larger Bench - Tribunal had earlier concluded that CESTAT had no jurisdiction to extend operation of a stay beyond the period of 365 days of the initial grant, in view of provisions of the 3rd proviso to Section 35C(2A) of the Central Excise Act, 1944 - Held that:- prima-facie case warranting reconsideration of the conclusion recorded in in appeals preferred by M/s Rajasthan State Industrial Development & Investment Corporation Limited [2014 (7) TMI 621 - CESTAT NEW DELHI], in the light, of the fact that the language of the third proviso to Section 35C(2A) of the 1944 Act the third proviso to Section 254(2A) of the Income Tax Act, 1961, is distinct and this distinction has a bearing on the interpretation of the 3rd proviso to Section 35C(2A) of the 1944 Act.
Since we discern a strong prima-facie case in support of the proposition that the Tribunal has the power to grant extension of stay beyond the period of 365 days from the initial grant of stay (wherever the delay in disposal of an appeal is not on account on any fault of the assessee), inter-alia , in the light of the decision of the Bombay High Court in Narang Overseas (P) Ltd., (2007 (7) TMI 5 - HIGH COURT, BOMBAY), we direct the respondents in the application/appeal not to take any coercive steps for realisation of the assessed liabilities, till disposal of the issue referred hereby to the Larger Bench.
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2014 (7) TMI 746
Small service provider Exemption under notification no.6/05-ST - providing the services under the brand name/trade mark of ICICI Bank Ltd. - Held that:- Just by providing the ‘Business Auxiliary Service’ to ICICI Bank Ltd. by using the promotional material provided by ICICI Bank Ltd., the Respondent cannot be treated as using the brand name of ICICI Bank Ltd. and providing their service under the brand name of ICICI Bank. In fact the Respondent are not the Franchise of ICICI Bank Ltd. in the sense that they are providing financial services by using the business model and brand name of ICICI Bank. It is not the case of the department that the respondent for using the brand name or trade name of ICICI Bank Ltd. were paying some amount to the bank. On the contrary, it is the ICICI Bank which is paying to the respondent for providing the marketing services. The respondent, therefore, cannot be treated using the brand name of ICICI Bank Ltd. - No infirmity in impugned order - Decided against Revenue.
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2014 (7) TMI 745
Imposition of penalty - Credit utilized before making payment to vendors - Validity of Commissioner's order - Held that:- Commissioner’s order does not have one column which is very important and which has been the cause of the wrong conclusion by the Commissioner. This is the opening balance in respect of each month. Because of not taking opening balance into account, the CENVAT credit available at the end of each month for utilization has become incorrect and as a result in that particular month which is examined by the Commissioner, there is excess utilization of credit vis-a-vis availability.
There was no excess utilization at all during the relevant period. Under these circumstances what has happened is only an accounting error by the appellant and that mistake has been rectified by them by paying the entire amount with interest and correcting their account suitably. Such being the position, since the entire amount has been paid before issue of show-cause notice and initiation of proceedings, the appellant need not be visited with penalty also. - penalty can be waived by invoking provisions of Section 80 of Finance Act 1994 also. - Decided in favour of assessee.
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2014 (7) TMI 744
Commercial or Industrial Construction Service - Works contract service for Delhi Jal Board - Tax imposed on the basis of agreement which states that "if payable is extra, it must be inferred that the appellant had collected the amount of service tax" - Held that:- The conditions precedent for ordering any person to remit (an amount collected as service tax, which is not required to be so collected), is a finding of fact that the person had in fact collected an amount towards service tax even though no service tax liability arises under the transaction qua which such collection is made. This finding of fact must be recorded by the Revenue. The liability to remit service tax under Section 73 A(2) does not arise on the basis of a mere permission in an agreement that the liability to compensate/reimburse to service tax liability of the service provider, is on the service recipient.
Sub-section (3) of Section 73(A) requires a notice to be issued to show cause why the amount, as specified in the notice, in respect of a liability arising under Section 1 and 2, should not be paid by the Noticee to the credit the Central Government. - The show cause notice in this case failed to allege that the appellant had collected service tax of ₹ 41,18,665/- from the Delhi Jal Board - Impugned order unsustainable - Decided in favour of assessee.
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2014 (7) TMI 709
Classification of services - CENVAT credit - claim of depreciation on capital goods exempted services - Non maintenance of seperate accounts - Credit in respect of trading activity - Held that:- the exact nature of the work undertaken under each category and how it is covered by the definition and whether the amount quantified is correct are not at all forthcoming from the impugned order. Especially crane supply clearly does not appear to be covered under ‘Cargo Handling Service’. Similarly while classifying one of the categories under the heading transportation, the learned Commissioner has proceeded to classify it under ‘Cargo Handling’. We are very conscious of the fact that the Tribunal is the last fact finding body in the dispute resolution mechanism for indirect tax levy by Central Government and therefore we should be treading carefully when recording our findings of facts and this cannot be done in a hurry. - matter remanded back.
Appellant had availed CENVAT credit on capital goods as well as claimed depreciation under Section 32 of the IT Act 1961. - Learned AR submits that the credit was taken in October 2007 and even at the time of adjudication, the appellants could not give the details and could not specifically confirm that they have filed a revised return. The learned counsel also could not clearly show whether the time limit for filing return was over and the return was filed or not. In the absence of any clarity in this regard, we consider that appellant should deposit this amount even if the matter is going to be remanded for de novo adjudication.
Reversal of credit towards traded goods - Held that:- Prior to 2008, Information Technology Service was also considered as exempted service and it has been excluded from the definition of ‘Business Auxiliary Service’ and even then it was held that Information Technology Service is an exempted service and therefore if separate accounts are not maintained, the amount as specified in Rule 6 of CENVAT Credit Rules is required to be paid.
The appellant is directed to deposit an amount of ₹ 10,00,000 - stay granted partly - matter remanded back.
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2014 (7) TMI 708
Sanction of rebate of services tax - Export of services - Scientific and Technical Services - Revenue contends that Business Support Service and cannot be considered as Scientific or Technical Consultancy Services - and Revenue contends that GE ITC is extended arm of GE USA - Held that:- GE USA is incorporated under the laws of State of New York and GE ITC is a company incorporated under the Companies Act 1956. This itself shows that both are separate entities. No other evidence has been taken into account to show that GE ITC is an extended arm. Even if it is a subsidiary company, as submitted by the learned counsel, a subsidiary company is considered as a separate entity in the eyes of law. Therefore GE ITC is not an extended arm for GE USA. - Decided against Revenue.
Classification of service - Business support service or Scientific and Technical Services - Held that:- appellants are providing a cluster of services and are receiving consideration in the form of cost plus 5% and therefore it has to be held that the service provided is Business Support Service cannot be upheld since for classification, the method by which consideration is determined cannot be the basis. The basis has to be the fact that the services provided should fit into the definition of the service under which it is supposed to be categorized - On the one hand it is appellants claim that they are providing only Scientific and Technical Analysis and specific evidence as regards why any activity of the appellant comes under Business Support Service by explaining the nature of the activity vis-`-vis the definition so pointed out to us. Therefore prima facie this view cannot be supported. Moreover as submitted by the learned counsel, subsequently Revenue itself has issued show-cause notice proposing classification of the services as Scientific and Technical Service. - Decided against Revenue.
Non compliance of conditions laid down in Rule 3(2) of Export of Services Rules 2005 - Held that;- Following decision of Gap International Sourcing (India) Pvt. Ltd. and Paul Merchants Ltd. it cannot be sustained that conditions laid down in Rule 3(2) of Export of Services Rules 2005 are not satisfied - Decided in favor of assessee.
Cenvat Credit - Nexus between input and output service - Held that:- this aspect was not considered by the lower authorities - though appeal is allowed on merit, matter remanded back to verify the nexus between input and output service and allow the refund claim within 3 months.
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2014 (7) TMI 707
Waiver of pre deposit - Coffee vending machines for employee of the company - Revenue held it as outdoor catering service - VAT paid for the services provided - whether the claim of the appellant that the transactions have suffered Value Added Tax (VAT) and as a consequence thereof, service tax stands excluded, is sustainable- Held that:- there was no material placed before the authorities to come to the conclusion that service tax is not payable in view of Notification No.12/2003-ST - Tribunal, did not order the entire amount, but has exercised its discretion and ordered pre-deposit of ₹ 30,00,000 - Since the VAT component has been paid, the interest of the Revenue is safeguarded as against the disputed claim. In this regard, the plea of the appellant relying on the decision of the Supreme Court in Imagic Creative Pvt. Ltd. v. Commissioner of Commercial Taxes, [2008 (1) TMI 2 - Supreme Court of India], more particularly paragraph (28) is relevant.
Tribunal was not justified in ordering the pre-deposit in the manner stated in its order - Order modified to the effect that the appellant shall make a pre-deposit of ₹ 15,00,000 - stay order modified.
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2014 (7) TMI 706
Waiver of pre deposit - Suppression of value of services - Undue hardship - Whether the Tribunal was justified in calling upon the appellant to make a pre-deposit of ₹ 2.50 Crores for entertaining an appeal in terms of Section 35-F of the Central Excise Act, 1944 - Held that:- If a specific amount is charged by the service provider under the mining services agreement, that agreement has to be tested on its own merits in terms of Section 67(1)(i) of the Finance Act, 1994. Nevertheless, falling upon Rule 3(b) of the Service Tax (Determination of Value) Rules, 2006, overlooking the provisions of Section 67(1)(i) of the Finance Act, 1994, may not be justified.
In this case, the agreement for providing mining services stands and the appellant has paid service tax in accordance with the value in the said agreement. In any event, Rule 4 of the Service Tax (Determination of Value) Rules, 2006 provides for the method in which the Central Excise Officer can satisfy himself as to the accuracy of any information furnished or document presented for valuation and it provides for a procedure. Such procedure has not been followed in the instant case.
The issue as to whether the back to back agreements entered into between the appellant and the service recipients was a method adopted by the appellant to suppress the value of services is also a question that should be answered in the appeal on considering Section 67(1)(i) of the Finance Act, 1994.
The plea of financial hardship has been raised by the appellant before the Tribunal and that has also been recorded in paragraph (8) of the order of the Tribunal. We find much force in the plea of the appellant regarding undue hardship and financial difficulty in pursuing the appeal on payment of the pre-deposit as ordered by the Tribunal. The same, therefore, requires to be modified considering the prima facie case of the appellant. - amount of pre-deposit reduced from ₹ 2.5 crores to ₹ 1 crore only - Decided partly favour of assessee.
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2014 (7) TMI 705
Levy of penalty u/s 76, 77 and 78 - The commission in revisionary exercise enhanced the penalty - Failure to take registration under that category, to file returns and to periodically remit the service tax due - interest and penalties under Section 75A, 76, 77 and 78 - Held that:- if the appellant remits 25% of the enhanced penalty under Section 78, as now determined by the impugned order, within 30 days from the date of this order , in terms of second proviso to Section 78, that would the sufficient compliance and would discharge the liability in this account. We however notice that the appellant already remitted the penalty of ₹ 24,250/-, imposed by the primary authority under Section 78. This amount is in excess of 50% of enhanced penalty of ₹ 44,864/- imposed by the Revisional Authority. Therefore this is sufficient compliance with the requirement of remittance required under the 2nd proviso to Section 78. - Decided in favor of assessee.
Regarding penalty u/s 77 - held that:- since discretion was exercised by the Primary Authority for levying the penalty under Section 77 at ₹ 1000/-, in the absence of a perversity in exercise of the discretion found by the Revisional Authority, we find no justification for enhancement of the penalty to ₹ 2000/- - enhanced penalty set aside - Decided partly in favor of assessee.
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2014 (7) TMI 704
Availment of CENVAT Credit - Premises on which service is provided and credit is availed in its respect was not registered with the Department - Held that:- unregistered premises ought to have registered with the jurisdictional Service Tax Officers as ‘Input Service Distributor’ in terms of Rule 3 of the ‘Service Tax (Registration of Special Category of Persons) Rules 2005’ read with Rule 7 of the Cenvat Credit Rules, 2004 - service tax is not paid by the rented premises as ‘Head Office’ for all the branches and no service tax registration is so taken by the appellant of such premises issuing credit taking document. In the facts and circumstances, appellant cannot take credit of the document issued by a premises not registered as an Input Service Distributor under the service tax provisions.
Argument of the appellant that extended period is not applicable in this appeal will not help their case as nowhere it has been brought to the knowledge of the department that cenvat credit is being taken by the appellant on a document issued by the service recipient who is not registered as ISD under Rule 3 of the ‘Service Tax (Registration of Special Category of Persons) Rules 2005’ read with Rule 7 of the Cenvat Credit Rules,, 2004 - Following decision of Mangalore Refinery and Petrochemicals vs. CCE Mangalore [2013 (9) TMI 326 - CESTAT BANGALORE] - Decided against assessee.
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2014 (7) TMI 670
Waiver of pre deposit - Service received in India or outside India - Whether the Tribunal was justified in not granting waiver of pre-deposit when there is no service received in India so as to attract the provisions of Section 66A of Finance Act, 1994 and Rule 3 of the Taxation of Services (Provided from outside India and Received in India) Rules, 2006 - Held that:- It is the specific case of the appellant that even as per the statement of Revenue, the services in this case was rendered outside India and there is no element of service received in India and therefore Section 66A of Finance Act, 1994 and Rule 3 of the Taxation of Services (Provided from outside India and Received in India) Rules, 2006, do not apply to the facts of the present case. However, the Department also rely upon Section 65(96a) of the Finance Act, 1994, which defines the term "Ship Management service" and those services are taxable once the recipient is located in India and the provider is located outside India and therefore the question of taxable event does not arise in the case of services rendered outside India by an agent outside India.
There are two important expressions in Section 35-F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka, (1993 (3) TMI 350 - SUPREME COURT OF INDIA) that under Indian conditions expression undue hardship is normally related to economic hardship. Undue which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances.
Order of Tribunal is modified that the Tribunal was not justified in ordering the pre-deposit in the manner stated in its order dated 10.6.2013; however, assessee is directed to make a pre-deposit of ₹ 50,00,000 towards pre-deposit on or before 8.8.2014 and subject to such compliance, as stated in the order of the Tribunal dated 10.6.2013, the pre-deposit of balance amount demanded shall remain waived and its collection shall stand stayed during the pendency of the appeal before the Tribunal - Conditional stay granted.
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2014 (7) TMI 669
Demand of service tax - Non payment of service tax collected from customers - rent-a-cab service - Extension of time of pre deposit order - Held that:- Tribunal has considered the prima facie case and ordered pre-deposit of the entire amount. When the matter was listed for reporting compliance, there was no plea made for extending the time to make pre-deposit, except stating that a writ petition has been filed challenging the conditional order passed by the Tribunal. The Tribunal considering the fact that in the writ petition this Court has not granted any stay of order, dismissed the appeal for non compliance of the conditional order of pre-deposit. The said order passed by the Tribunal is justified, as this Court in the writ petition has not granted any stay of the conditional order passed by the Tribunal. No extension of time is sought for and the order has not been complied. No reason to differ with the view taken by the Tribunal - No substantial question of law arises - Decided against assessee.
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2014 (7) TMI 668
Restoration of appeal - Non compliance of pre deposit order - Extension of time granted by Court - Held that:- Section 35-F of the Central Excise Act makes it amply clear that the whenever any appeal is filed, the person filing the appeal should deposit before the adjudicating authority the duty demanded or the penalty levied, unless the same is dispensed with by the Tribunal. In case such deposit as contemplated under Section 35-F of the Central Excise Act is not deposited, the appeal is liable to be dismissed. - Tribunal, after hearing the learned counsel on either side; perusing the records and keeping in mind the undue hardship that would be caused to the appellant and the interest of the Revenue, had shown sufficient indulgence to the appellant by granting time to deposit a part of the tax demanded. Thereafter, the Tribunal also granted extension of time to comply with the said order, of course with a default clause that the appeal will be dismissed in the event of non-compliance of the conditional order within the stipulated time. As the appellant failed to comply with the conditional order passed by the Tribunal, the Tribunal has, in our considered opinion, rightly dismissed the appeal for non-compliance of the provisions of Section 35-F of the Central Excise Act. - No substantial question of law arises - Decided against assessee.
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2014 (7) TMI 667
Waiver of pre deposit - Demand of service tax - Imposition of penalty and interest - Held that:- if the petitioner is directed to deposit the demand of service tax with interest as pre-deposit and penalty imposed under Sections 75A, 78, 76 of Chapter V of the Act is waived and the appeal is decided and disposed on its own merits, it will meet the ends of justice. We apprehend that if the petitioner deposits the entire amount with penalty imposed under Sections Sections 75A, 78, 76 of Chapter V of the Act, it would cause undue hardship to the petitioner. - However, parties do not invite any further reasoned order if the tribunal is directed to decide the appeal preferred by the petitioner on deposit of the entire demand of service tax with interest as pre-deposit and the penalty imposed under Sections Sections 75A, 78, 76 of Chapter V of the Act is waived.
Impugned order passed by the tribunal dated 29/11/2013 dismissing the appeal preferred by the petitioner is hereby quashed and set aside and it is directed that, on deposit of the entire demand of service tax i.e. ₹ 5,53,367/- with interest levied by the original authority while passing the Order in Original as pre-deposit within a period of eight weeks from today, the tribunal is directed to decide and dispose of the appeal preferred by the petitioner in accordance with law and on its own merits. The deposit of penalty imposed under Sections Sections 75A, 78, 76 of Chapter V of the Act is hereby waived - Decided conditionally in favour of assessee.
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