VAIGAI CANTEEN Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) WE have heard both sides on the application for waiver of pre -deposit of service tax of Rs. 4,50,234/ -and penalty of Rs. 200/ - per day under Section 76, Rs. 1,000/ - under Section 77 and Rs. 9,00,468/ - under Section 78 of the Finance Act, 1994. Service tax has been confirmed on outdoor catering services rendered by the applicants during the period 10 -9 -2004 to 31 -3 -2005.

(2.) THE applicants do not have prima facie case for waiver on merits in view of the fact that the definition of outdoor catering as it stood during the relevant time was "a caterer engaged in providing services in connection with catering at a place other than his own" and the applicants herein were providing catering services at premises leased out to them. Although heavy reliance is placed by the learned Counsel for the appellants on the amendment to the definition so as to include "a place provided by way of tenancy or otherwise by the person receiving such services" we do not find that this makes much of a difference prima facie to the sustainability of the demand during the period in dispute. The next argument raised is that of time -bar. The show -cause notice covering the period as above -mentioned has been issued on 22 -11 -2006 and the appellant's claim that they were under the bona fide belief that since they have leased out the premises and were carrying on catering services, they were not required to pay service tax and doubts had been raised by the trade, resulting in the issuing of CBEC Circular dated 27 -7 -2005 to clarify that the definition of outdoor caterer post -amendment was modified so as to provide that outdoor caterer 'includes a caterer engaged in providing services in connection with catering at a place provided by way of tenancy or otherwise by the person receiving such services'. Lastly the applicants make an offer to pay Rs. 1,00,000/ - of the total outstanding service tax amount.

(3.) THE applicants have not made out any prima facie case on merits. However, there is some force in their submission that the demand is prima facie barred by limitation as no suppression or misstatement with intent to evade payment of tax has been prima facie made out by the Revenue. However, since the applicants make an offer to deposit an amount of Rs. One lakh towards service tax, we accept the offer and direct pre -deposit of Rs. 1,00,000/ - (Rupees one lakh only) within a period of eight weeks from today and on such deposit the pre -deposit of the balance amount of service tax and penalties shall be waived and recovery thereof stayed pending the appeal. Failure to comply with the direction shall result in vacation of stay and dismissal of appeal without prior notice.