2013 (10) TMI 482 - AT - Service Tax

Condonation of Delay Held that - According to the affidavit enclosed to the application of COD, the delay occurred because the Manager of the Cochin Unit had resigned and the Manager of Chennai Unit who was looking after the branch made arrangement for filing the appeal in September 2011 but resigned thereafter - the problem has arisen because of genuine administrative and unavoidable difficulties and therefore the COD has to be allowed - At the same time there was negligence on the part of the headquarters itself in not ascertaining whether the appeal has been filed or not - while the COD can be allowed, it cannot be free - the appellant is directed to deposit an amount. Penalty u/s 76 Power of Commissioner u/s 84 of Finance Act - Held that - Following CST, Bangalore Vs. Motor World 2012 (6) TMI 69 - KARNATAKA HIGH COURT , Even if the ingredients stipulated in Sections 76 and 78 of the Act are established, if the assessee shows reasonable cause for such failure, then the authority has no power to impose penalty in view of Section 80 of the Act stay granted.

Summary

Issues involved: Condonation of delay in filing the appeal; Imposition of penalty under Section 76 invoking powers under Section 84 of Finance Act, 1994; Stay application based on a favorable decision of the Hon'ble High Court of Karnataka.

Condonation of Delay: The appellant sought condonation of a 279-day delay in filing the appeal, citing administrative difficulties due to resignations of managers at different units. The headquarters in Delhi mistakenly assumed the appeal was filed, leading to the delay. The COD was allowed due to genuine administrative issues, but the tribunal noted negligence on the appellant's part for not monitoring their statutory liabilities properly. To grant the COD, the appellant was directed to deposit Rs.10,000 within six weeks and report compliance.

Imposition of Penalty: The issue involved the imposition of a penalty under Section 76 by the Commissioner using powers under Section 84 of the Finance Act, 1994. The tribunal referenced a favorable decision of the Hon'ble High Court of Karnataka in the case of CST, Bangalore Vs. Motor World [2012(27) STR 225(Kar.)], which supported the appellant's position. Consequently, the stay application was allowed subject to compliance with the tribunal's directives.

Conclusion: The tribunal scheduled the appeal for a future date without issuing a notice, emphasizing the need for the appellant to comply with the requirements set forth in the judgment. The decision highlighted the importance of monitoring statutory obligations and the consequences of negligence in administrative matters.