Judgment:
1. The appellant is required to pre-deposit Service Tax amount of Rs. 1,80,84,957/- besides penalties. The appellants have challenged the levy of Service Tax under the category of Business Auxiliary Service under Sub-section (19) of Section 65 of the Finance Act on two grounds, (a) that the activity carried out by them results in a process of manufacture and hence Service Tax is not attracted; (b) the second ground taken by them is that the valuation arrived at by the authorities to levy Service Tax is not correct.
2. The learned Counsel files a written submission wherein it has been shown that the authorities have committed an error in including the Road transport, sampling charges and interest. It is their contention that if the correct valuation of the amounts are arrived at, then, the total tax liability works out to Rs. 32.39 lakhs and as against this amount, they have already pre-deposited Rs. 85 lakhs. The challans demonstrating the payment has been enclosed in the Paper Book. It is submitted that even going by the amounts confirmed, they have already pre-deposited more than 50% of the amount.
3. The learned JDR defends the order and filed a detailed reply. He submits that deduction claimed in respect of the rail freight has been granted. He submits that the calculation arrived at by the appellants is not correct.
4. We have carefully considered the submissions. As per the records, the appellants have already pre-deposited Rs. 85 lakhs. They have challenged the levy of Service Tax on the ground that the activity carried out by them results in a process of manufacture. The learned Counsel has not pressed this ground at this stage, as it requires detailed consideration. The point raised is pertaining to the correct valuation and according to them, the total tax liability would not be more than Rs. 32 lakhs and against this, they have already deposited Rs. 85 lakhs. They have also pleaded financial hardship. Taking into consideration all the pleas and the deposit of Rs. 85 lakhs already made, we are inclined to grant waiver of pre-deposit for the balance of the tax and penalty and its recovery till the disposal of the appeal.
As the total tax amounts are more than Rs. 1.80 crores, the learned JDR submits that the appeal is required to be taken up for out of turn hearing. The prayer is accepted. The stay application is allowed.
Appeal to come up for hearing on 21^st September, 2007. Meanwhile, the Commissioner to file his reply to the calculation sheets filed by the Counsel with regard to the tax liability arrived at by them.