2009 (6) TMI 889 - AT - Service Tax

Summary

Issues:
1. Requirement of pre-deposit of penalty amounts under Section 76 and Section 78.
2. Default in payment of Service Tax by the appellants.
3. Arguments for and against imposition of penalty under Section 78.
4. Consideration of waiver of pre-deposit of penalties imposed.

Analysis:
1. The judgment deals with the requirement of pre-deposit of penalty amounts under Section 76 and Section 78. The appellants were directed to pre-deposit specific penalty amounts in relation to different orders. Notably, penalties were imposed under Section 76 and Section 78 for various cases.

2. The appellants were found to have defaulted in the payment of Service Tax on due dates, although they had eventually paid the entire service tax liability along with interest. The appellants were engaged in providing manpower services to IT companies, and due to delays in payment from service receivers, they faced challenges in meeting salary obligations to employees promptly to avoid employee turnover.

3. The advocate for the appellants argued that there was no intention to evade payment of service tax, emphasizing the economic challenges faced by the industry. It was highlighted that the Adjudicating authority had not imposed any penalty under Section 78 post-May 2008. On the other hand, the Jt. CDR contended that the appellants had collected money from service receivers but failed to discharge their liability on time, advocating for imposing penalties.

4. After careful consideration, the Tribunal found that the appellants presented a strong case for the waiver of pre-deposit of penalties imposed. Considering that the entire service tax liability had been settled along with interest, the Tribunal ordered a total waiver of pre-deposit of the penalties until the disposal of the appeals, thereby allowing the stay applications.

In conclusion, the judgment focused on the issue of pre-deposit of penalty amounts under Section 76 and Section 78, evaluating the default in payment of Service Tax by the appellants and the arguments presented for and against the imposition of penalties. The decision to grant a waiver of pre-deposit of penalties was based on the circumstances and the fact that the service tax liability had been cleared along with interest.