ORDER
S.L. Peeran, Member (J)
1. The appellants are required to pre-deposit Service Tax of Rs. 1,98,530/- and likesum of Service Tax levied as penalty. An amount of Rs. 12,480/- has already been paid and adjusted. The appellants had entered into a contract with M/s. Shalimar Paints for carrying on the services of C & F Agents. They had taken different Service Tax registration for Trichur, Calicut and Kannur depots from the office of Superintendent of Central Excise, Service Tax, ‘C’ Range, Ernakulam. The Department issued show cause notice raising demands even on the following elements paid by the assessee, such as rent, local transport, loading and unloading, telephone charges and salaries paid to the staff in the depots by way of reimbursement from M/s. Shalimar Paints. This has been treated as part of service charges received by the assessee. This is contested and the appellants are relying on the Tribunal ruling rendered in the case of E.V. Mathai & Co. v. CCE, Cochin. The Commissioner has followed this ruling and distinguished the same.
2. The Chartered Accountant submits that these elements are not includable, however he submits that liability to C & F would be around Rs. 85,000/-. The learned Chartered Accountant submits that the appellant is a proprietary concern and faced with severe financial hardship and pleads for waiver of pre-deposit.
3. The learned JDR reiterates the departmental view and submits that the appellants have to pre-deposit the entire amount.
4. On a careful consideration, we find that the appellants are admitting that their liability is only to the extent of Rs. 85,000/-. Taking into consideration the financial hardship pleaded by the appellants, we direct them to pre-deposit a sum of Rs. 50,000/- (Rupees Fifty Thousand Only) within a period of three months from today. On such pre-deposit, the balance of duty and penalty stands waived. There shall be no recovery by revenue during the pendency of the appeal. Call on to report compliance on 4th June 2007. Failure to comply with the terms of the stay order will entail dismissal of the appeal.
(Pronounced and dictated in open Court)
