VISRANTHI BUILDERS Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, I note that the lower authority has confirmed a demand of service tax of over Rs. 3.33 lakhs against the appellants for the period June 2005 to April 2006 under Section 73 of the Finance Act, 1994 and has imposed on them penalties under Sections 76 to 78 of the Act. These penalties are the maxima prescribed under the respective provisions, the one imposed under Section 78 being the highest (Rs. 3,33,451/ -). It further appears from the records that an amount of Rs. 3.22 lakhs was paid as service tax by the party prior to issue of the show -cause notice. The balance amount (a little over Rs. 11,000/ -) was deposited prior to adjudication of the notice. The learned Counsel for the appellants has prayed for waiver of predeposit and stay of recovery in respect of the penalties on the ground that the entire amount of tax was paid before adjudication of the case and on the further ground that the earlier non -payment of tax was on account of a "confusion" which prevailed during the material period. It is submitted that the question whether construction contractors were liable to pay service tax remained unsettled during that period. In this connection, reference is made to a Circular of the Board as also to a judgment of the Bombay High Court. However, neither of these has been produced by the consultant. In the circumstances, at the present stage, I am not in a position to give the benefit of Section 80 of the Finance Act, 1994 to the appellants. The appellants have not pleaded financial hardships.

(2.) IN the aforesaid circumstances, in a lenient approach, I direct them to predeposit only an amount of Rs. 11,000/ - (Rupees eleven thousand only), which shall be deposited within four weeks. Report compliance on 4th July 2008.