Per: Mr.B.S.V. Murthy: The appellant is a proprietary concern engaged in providing security services. It was found after investigations that the appellant had not paid the service tax during the period from 2001 to 2007 and accordingly the show cause notice was issued. During the adjudication proceedings, the original adjudicating authority confirmed the demand for service tax amounting to Rs.3,45,681/- with interest. Further, the penalties were imposed under Section 76 and Section 78 of Finance Act, 1994 equal to the service tax amount. Stay application filed by the appellant before Commissioner (Appeals) was considered and the appellant was asked to deposit Rs.3 lakhs. Since the appellant failed to deposit the same, the appeal has been rejected.
2. Learned advocate on behalf of the appellant submitted that the stay order was passed by one Commissioner (Appeals) whereas the appeal was rejected by another Commissioner (Appeals), which is not correct. Further, he also submitted that the whole case of the department is based on the income tax return and therefore in view of the decision of the Tribunal in the case of M/s Synergy Audio Visual Workshop P. Ltd. Vs. CST Bangalore as reported in 2008 (10) STR 578 (Tri-Bang.), demand itself is liable to be set aside and no case has been made by the department in view of the fact that the Commissioner (Appeals) has not passed any order on merit. He submits that the matter may be remanded to the Commissioner (Appeals) to decide the appeal without insisting on any pre-deposit.
3. Learned JDR, on the other hand, states that the case of the department is based on the bank statement which shows receipt of consideration for services rendered, income tax return and statement of authorized signatory. He submits that the department has a strong case even though he fairly agrees that for 7 months during 2001-2002, the demand is not sustainable being beyond 5 years.
4. In this case, there is no dispute that the appellant is providing security services. The authorized signatory, who is a proprietor, has admitted that such services were provided and he also gave the names of the customers. Further, the department had collected the details of cash received from the bank account and authorized signatory clarified that the amount received from the clients for providing service was deposited in the bank account in Dena Bank, Meghani Nagar branch and another bank. The department has also recovered various registers and attendance register submitted to I.T. Department for the period from March 2001, offer letter of the firm for providing security services, statement of account from I.T.Department, etc. The main evidence that has been relied upon by the department are bank statements and statement of authorized signatory. The I.T. Department document mainly relates to the period prior to 2001 and the statement of accounts for 2001 to 2002 would cover a part of the period. What is required to be proved by the department is that the appellant has provided services and have received consideration, in my opinion, can be said to have been shown by the statement of the authorized signatory and the bank statement. Under these circumstances, the appellant had failed to make out a prima facie case in their favour and therefore I do not find anything wrong with the pre-deposit of Rs.3 lakhs ordered by Commissioner (Appeals). Nevertheless, taking note of the fact that a portion of the demand is time barred and as per the statement of learned advocate that this amount is about to Rs.80,000/-, I consider that the amount of pre-deposit required to be made can be reduced to some extent. As regards financial difficulty, the learned advocate fairly admitted that he had no documentary evidence to show. But the very fact that the business is closed is sufficient proof to support financial difficulty according him. I cannot agree with this view. Therefore, I hold that the financial difficulty has not been shown and since the appellant does not have a prima facie case, I consider that the appellant should make a deposit of Rs.2 lakhs (Rupees Two lakhs only) towards pre-deposit under Section 35F of Central Excise Act, 1944 made applicable to service tax matters by Section 83 of Finance Act, 1994, within eight weeks and report compliance to Commissioner (Appeals) who shall after noting the compliance shall hear the appeal without insisting on any further pre-deposit. Learned JDR has no objection to remand the matter.
5. The appeal is disposed of by way of remand. The stay petition also gets disposed of. (Dictated & Pronounced in Court) (B.S.V. Murthy) Member (Technical) cbb 4