2011 (5) TMI 613 - AT - Service Tax

Technical Testing and Analysis service - stay for predeposit filed - Held that - It was submitted by the appellant that regarding payment of Service Tax, they can collect and pay only if they have Budget allocation in their Budget for such expenses, which requires the provisions of Service Tax payment specifically. The funds can then only be released by the Finance Department to them. Considering these facts, and that the appellants had made part payment of an amount of Rs.28,36,051/- the condition of pre-deposit of balance amount of duty and entire amount of penalty is to be dispensed - in favour of assessee.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Liability to pay Service Tax by M/s Gujarat Engineering Research Institute.
3. Pre-deposit of balance amount of duty and penalty.

Condonation of Delay:
The appellant, M/s Gujarat Engineering Research Institute, filed an appeal against the demand of Service Tax and penalty imposed on them after delay of 90 days. They attributed the delay to the need for legal department approval, appointing a lawyer/consultant, studying the case, and preparing appeal documents. The Tribunal considered the delay genuine due to the organization's procedural requirements and condoned it.

Liability to Pay Service Tax:
M/s Gujarat Engineering Research Institute contended that being a government entity working under the Govt. of Gujarat State, they were exempt from paying Service Tax under Article 289 of the Constitution of India. The Tribunal examined the issue and noted that the appellants had made a partial payment of Rs.28,36,051. Considering the budget allocation process and the funds release mechanism, the Tribunal dispensed with the pre-deposit condition for the balance amount of duty and penalty.

Pre-deposit of Balance Amount of Duty and Penalty:
The Tribunal, after considering the facts and the partial payment made by the appellant, decided to dispense with the pre-deposit condition for the balance amount of duty and the entire penalty. The stay petition was disposed of accordingly, allowing M/s Gujarat Engineering Research Institute to proceed without making the full pre-deposit.

This judgment by the Appellate Tribunal CESTAT, Ahmedabad addressed the issues of delay condonation, the liability of a government entity to pay Service Tax, and the pre-deposit requirement for duty and penalty. The Tribunal considered the genuine reasons for the delay in filing the appeal, the exemption claim based on government status, and the partial payment made by the appellant in determining the pre-deposit condition.