2007 (1) TMI 55 - AT - Service Tax

Service tax Alleged that appellant is liable to play service tax under Scientific and Technical Consultancy Service Appeal allow by way remand to the Commissioner

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Applicability of Service Tax on activities of a Government Department.
3. Jurisdiction of the Commissioner regarding the levy of Service Tax on sovereign functions.

Condonation of Delay:
The appellant, a Government Department, filed an appeal with a delay of 44 days. The Deputy Director of Mines and Geology explained that the delay was due to the file being held up in the Advocate General's office for opinion through the Government Pleader. The Tribunal accepted the explanation, noting no negligence on the appellant's part. The Condonation of Delay application was allowed.

Applicability of Service Tax:
The Department of Mines and Geology was directed to pay Service Tax of over Rs. 1.80 crores for activities categorized as 'Scientific and Technical Consultancy Service'. The appellant argued that as a Government entity, their functions are sovereign and not subject to Service Tax under the Finance Act. They requested an opportunity to contest the matter and claimed that the impugned order was without jurisdiction and not in accordance with the law.

Jurisdiction of the Commissioner:
The Commissioner was directed to reconsider the applicability of Section 68 of the Finance Act and whether Service Tax could be imposed on the Government for sovereign functions. The Tribunal found a prima facie case that Service Tax may not be leviable for such activities. The impugned order was set aside, and the case was remanded to the Commissioner for the appellants to file a detailed reply and make submissions. The Commissioner was instructed to dispose of the matter within three months from the receipt of the order.