P.G. Chacko, Judicial Member - On a perusal of the records and hearing both sides on the stay application, we have found prima facie case for the appellant and accordingly grant waiver of pre-deposit and stay of recovery, considering particularly the fact that the appellant has already paid an amount of Rs. 24,36,054/- towards the demand confirmed against them, for which they have produced documentary evidence. There is a miscellaneous application filed by the under Rule 23 of the CESTAT procedure Rules for taking on record certain documents which are relevant to the substantive issues involved in the case. After hearing both sides, we allow this application as well inasmuch as these documents although relevant to the substantive issues could not be produced by the appellant before the adjudicating authority and are very much essential for proper decision on the said issues.

2. We have also found this case fit for remand to the adjudicating authority. The learned Commissioner has confirmed the following demands against the appellant and has also imposed the following penalties on them:

"(a)I confirm the demand for an amount of Rs. 87,69,021/- (Rupees Eighty Seven Lakhs Sixty Nine Thousand Twenty one only) towards Service Tax (including the Education Cess, Secondary and Higher Education Cess) under proviso to Section 73(1) of the Finance Act, 1994.

(b)I demand interest at the applicable rates on the amount at (a) above, under the provisions of Section 75 of the Finance Act,

(c)I impose a penalty of Rs. 87,69,021/- (Rupees Eighty Seven lakhs Sixty Nine Thousand Twenty one only) under Section 78 of the Finance Act, 1994.

(d)I impose a penalty of Rs. 100/- per day for the period up to 17.04.2006 and Rs. 200/- per day or @ 2% of such tax per month for the period from 18.04.2006. whichever is higher, under Section 76 of the Finance Act, 1994, subject to maximum of the Service Tax amount payable at (a) above.

(e)I impose a Penalty of Rs. 1,000/- (Rupees One thousand only) under Section 77 of the Finance Act, 1994 for not reflecting correct Taxable value in the periodical returns.

(f)Under first proviso to Section 78 of the Finance Act, 1994, the penalty imposed at (c) above stands reduced to twenty five percent of the service tax determined, in case the assessee pays the entire Service Tax determined under proviso to Section 73 of the Finance Act, 1994 along with interest under Section 75 ibid and the reduced penalty of twenty five percent within thirty days of the receipt of this order."

3. The above demands were confirmed against the assessee on the basis of the following allegations raised in the show-cause notice:

"(i)The Appellants have paid Service Tax for the period Jan 2005 to Mar 2008 on 25% of the taxable value by availing the abatement benefit under Not. No. 1/2006-ST dtd. 1.03.2006 without fulfilling the conditions stipulated in the above Notification.

(ii)The Appellants have incurred an amount of Rs. 9,91,51,231/- towards freight charges for both outward and inward transport on which the Service Tax payable is Rs. 1,10,59,165/-

(iii)The Appellants have paid Service Tax to the tune of Rs. 14,56,149/-, as detailed in the Annexure enclosed to the show-cause Notice, on the suppressed value, that too availing the abatement under Not. No. 1/2006-ST dtd 1.03.2006, without fulfilling the conditions stipulated therein.

(iv)As the Appellants did not fulfill the conditions stipulated under the said Notification, the value of the taxable service shall be gross amount charged by the Appellants for such service as laid down under Sec. 67 of the Finance Act, 1994 and accordingly the actual value of the taxable services incurred were taken into account for arriving at the Service Tax amount by applying the rates of Service Tax applicable for the relevant periods.

(v)The fact of short payment of Service Tax has come to light only during the scrutiny of the Appellant's Financial Records by the Departmental Officers and the Appellants never disclo