T.K. Jayaraman, Member (T)
1. In terms of the impugned order, the appellant is required to pre-deposit an amount of Rs. 7,36,236/- for the period from 29.9.04 to 3.3.05. The learned advocate pointed out that the period of demand is from 29.9.04 to 3.3.05 whereas the Show Cause Notice was issued on 1.6.06 invoking the longer period. He argued that Show Cause Notice is clearly time barred as there cannot be any suppression of facts in this case. He stated that the relevant invoices were actually given by the appellants themselves to the Department. Moreover, the same issue was the subject matter of adjudication proceedings for an earlier period. He relied upon the decision of the Hon’ble Apex Court, in the case of Nizam Sugar Factory to show that once Show Cause Notice is issued on the basis of certain facts, for a subsequent period, Show Cause Notice invoking longer period cannot be issued. He also argued that the appellants were under the bonafide belief that as a sub-contractor, they are not liable to service tax.
2. The learned DR stated that the issue has already been decided by this Bench in party’s own case cited in 2007 (7) STR 559 (Tri.-Dehi), wherein the demand of service tax was held sustainable. The learned Advocate stated that the said order of the Tribunal is under challenge. He requested that in view of the submissions, pre-deposit of entire service tax may be waived. He also referred to the Supreme Court decision in the case of BSNL v. UOI and argued that in respect of work contract, the value of the material portion has to be excluded and only the value of the service tax component can be levied to service tax. He invited our attention to the various invoices and stated that the appellants had already paid service tax. His point is that the impugned service rendered by them amounts to work contract and is liable to service tax only with effect from 1.6.07 and hence, for the relevant period, the appellants are not liable to any service tax.
3. On a very careful consideration of the issue, we find that learned advocate has urged several legal contentions. However, we find that the relevant invoices were not available with the department for issue of Show Cause Notice within a period of one year. Therefore, it is the department’s contention that this is a fit case for invocation of longer period. Another point urged by the department is that the Tribunal has taken a view on the leviability of the activity of the appellant to service tax. Henee, learned DR requested the Bench to put the appellants to terms at this stage. Since the issues involved have to be examined indepth at the stage of final hearing, we cannot say that the appellants have prima facie strong case on merit in the fact of the case. Hence, we order the appellant to pre-deposit 50% of the service tax demanded within a period of three months from today. On such deposit, the balance amount shall be waived till the disposal of appeal.
Compliance to be reported on 24.4.08
(Dictated in the open court)