2013 (8) TMI 455 - SC - Service Tax

Stay of Duty Demand - appeal against the order of CESTAT for confirmation of Demand of service tax and cess with interest of statutory levy and the air tickets sold Held that - There was no justification to stay the demand of service tax under the order - Prayer for stay to that extent was rejected. Penalty u/s 76 and 78 - Held that - Until final disposal of appeal, recovery of penalty amount to be stayed - penalty had also been imposed on the appellant u/s 78 of the 1994 Act - That amount had already been paid if the penalty was payable u/s 78, penalty can not be imposed u/s 76 - The position was admitted by the revenue in the affidavit filed by the concerned Commissioner -in the order in original, a specific finding had been recorded that the appellant had not indulged in fraud, collusion or willful mis-statement nor had the appellant contravened the provisions with intent to evade payment of service tax.

Summary

Issues:
1. Confirmation of demand of service tax and cess by the Tribunal
2. Confirmation of demand of service tax and cess with interest by the Commissioner
3. Imposition of penalty under Section 76 of the Finance Act 1994
4. Imposition of penalty under Section 78 of the Finance Act 1994
5. Stay of demand of service tax
6. Stay of penalty amount under Section 76
7. Payment of remaining service tax amount

Analysis:

1. The Supreme Court addressed the appellant's grievance against the Customs, Excise and Service Tax Appellate Tribunal's order confirming the demand of service tax and cess by the Commissioner. The Tribunal upheld the confirmation of demand related to service tax and cess, including interest, concerning air tickets sold before and after a specific date.

2. The Court admitted the Civil Appeal and considered an application for stay issued on the same day. The appellant was informed of the substantial payment required towards service tax and penalty as per the impugned order.

3. The appellant, through senior counsel Mr. S. Ganesh, mentioned that a portion of the service tax liability had already been deposited, while the total amount was significant. After hearing both parties, the Court rejected the prayer for staying the demand of service tax.

4. In terms of penalties under Sections 76 and 78 of the Finance Act 1994, the Court noted that the appellant had paid the penalty imposed under Section 78. The revenue admitted that if a penalty was payable under Section 78, it could not be imposed under Section 76. Additionally, the original order did not find the appellant guilty of fraud or intent to evade service tax payment.

5. Considering the above aspects, the Court decided to stay the recovery of the penalty amounting to Rs. 16.75 Cr. until the final disposal of the appeal, as the appellant had already paid the penalty under Section 78 and had no fraudulent intent.

6. The appellant requested four weeks to deposit the remaining Rs. 7 Cr. towards service tax, which was granted by the Court. Consequently, the Court disposed of the relevant application and expedited the hearing of the appeal for a prompt resolution.