2008 (10) TMI 573 - AT - Service Tax

Summary

Issues:
1. Requirement of pre-deposit under Section 75 of the Finance Act
2. Penalty under Sections 78, 76, and 77 of the Finance Act for non-payment of service tax by a State Govt. undertaking providing transport services
3. Financial hardship faced by the appellants and the amount to be pre-deposited

Analysis:
1. The judgment in the case required the appellant, a State Govt. undertaking providing transport services, to pre-deposit Rs. 9.38 crores under Section 75 of the Finance Act. Additionally, penalties of Rs. 5,61,58,221/- under Section 78 of the Finance Act and separate penalties under Sections 76 and 77 of the Finance Act were imposed in accordance with the impugned order.

2. The appellant was engaged in providing various transport services in Andhra Pradesh, including "Mandap keeper" services and chartered/contract carriage/tour services. The services provided included supplying buses to private parties for various purposes like pilgrimages, marriages, leisure travel, and excursions. Despite operating on the basis of casual, inter-state casual, and chartered contracts, the appellant did not obtain contract carriage permits for certain services provided to industries, institutions, and public sector undertakings. As a result, the department held that the appellant had not paid service tax under the category of "tour operator services" and confirmed the demand after due consideration.

3. The appellant, facing financial hardship and significant losses, requested to deposit a reduced amount due to financial constraints. The Stay Order from a previous case directed the appellant to pre-deposit Rs. 50 lakhs against a total demand exceeding Rs. 3.97 crores. Considering the financial difficulties faced by the appellant, the Tribunal directed them to pre-deposit Rs. 75 lakhs within three months from the date of the order. Failure to comply would result in the dismissal of the appeal. However, upon making the required deposit, the balance of demands would be waived, and recovery stayed, with the stay order remaining in force even after 180 days from the deposit date.