ARIHANT ADVANCE HEALTHCARE PVT. LTD. Vs. CST

JUDGEMENT

(1.) APPELLANT is engaged in providing beauty parlour service, health club and fitness centre service. During the audit of the appellant, it was observed that the hair treatment service provided by the appellant is part of beauty treatment service and therefore exemption from payment of service tax payable to hair cutting services is not available to them and since appellants could not provide bifurcation of hair cutting and hair treatment service provided to the clients, an amount of Rs. 23,763/ - to its service tax was found to be payable by the appellants. Further it was also observed by the department that income shown in the balance sheet and reported in ST -3 return does not tally and the tax difference arisen because of this worked out to be Rs. 896. Further it was also noticed that appellants were engaged in providing services of fashion design and interior design courses to the students on behalf of National Institute of Fashion Designing, Chandigarh and department took a stand that service tax is payable on such courses and the service tax payable was worked out to Rs. 5,32,293/ -. The original adjudicating authority in his order demanded service tax amounting to Rs. 6,24,998/ - with interest and also imposed penalties under various sections of the Finance Act, 1994. On an appeal filed by the appellants, the Commissioner in his stay order directed the appellants to deposit the entire amount of service tax and interest under Section 35F of Central Excise Act, 1944 and since the appellants failed to pay the amount and their modification application was not considered favourably, appeal has been rejected on the ground of non compliance with the stay order.

(2.) AFTER hearing both the sides, we find that in this case there is no order on merit. The liability of the appellants on the various courses run by them which forms substantial part of demand is basically a question of interpretation of law and requires all the facts and evidences to be considered in detail and also the judicial precedents in such cases which has not been done. Having regard to the fact that this is a case where unless all the facts and evidences are considered a decision cannot be reached but at the same appellants have not been able to make out a prima -facie case, we find it appropriate that a deposit of 50% of the service tax demanded would be sufficient for the purpose of pre -deposit as per Section 35F of Central Excise Act, 1944. Accordingly we direct the appellant to deposit 50% of the service tax within eight weeks from the date of receipt of this order and report compliance to the Commissioner (Appeals). We remand the matter to Commissioner (Appeals) for decision on merits after taking note of the compliance by the appellants with our direction to deposit 50% of service tax. In the result the stay petition is allowed with a direction to deposit 50% of service tax within eight weeks and report compliance to Commissioner (Appeals) and appeal is remanded to the Commissioner (Appeals) for decision on merits after giving an opportunity to the appellants to present their case.