2009 (3) TMI 887 - AT - Service Tax

Summary

Issues:
Stay application against order-in-original for payment of Service Tax, penalties, and delay in submission of ST-3 Return.

Analysis:
The applicant, engaged in issuing air tickets, filed a stay application against an order-in-original for payment of Service Tax, penalties, and delay in submission of ST-3 Return. The Commissioner of Service Tax, Mumbai, passed the impugned order based on an investigation initiated by officers of DGCEI, Mumbai, who conducted a search of the applicant's office premises. The applicant admitted liability for Service Tax but sought waiver of interest and penalties. The applicant claimed that one individual, Shri P.K. Agarwal, managed the tax liabilities independently, without the knowledge of the management. However, the Revenue contended that the management was aware of Shri P.K. Agarwal's activities. The Tribunal found it to be a case of misappropriation of Service Tax funds collected from customers, with the applicant's defense being that Shri P.K. Agarwal was responsible for the misappropriation.

The Tribunal held that the applicant failed to establish a prima facie case in their favor. As a result, the Tribunal directed the applicant to pre-deposit the balance amount of Service Tax, interest on the entire amount, and a penalty within eight weeks. Failure to comply would lead to the dismissal of the appeal without further notice. The compliance deadline was set for a specific date.

In conclusion, the Tribunal's decision emphasized the importance of pre-depositing the required amounts to proceed with the appeal process. The judgment highlighted the seriousness of misappropriation of Service Tax funds and the need for accountability in tax matters.