2014 (3) TMI 188 - AT - Service Tax

Waiver of pre deposit - Penalty u/s 76 - Application of Section 80 - Whether the penalty imposed on the assessee under Section 76 is liable to be sustained - Held that - entire amount of service tax and education cesses was paid with interest in October 2011 after the original authority adjudicated upon the show-cause notice - provision of sub-section 2 of Section 80, prima facie, inapplicable. In the result, the prayer for waiver and stay in respect of the penalty cannot be acceded to - Stay denied.

Summary

Issues: Delay in filing appeal, imposition of penalty under Section 76 of Finance Act 1994, maintainability of appeal, applicability of Section 80 of Finance Act 1994, waiver and stay of penalty.

1. Delay in filing appeal:
The judgment addresses the condonation of a 317-day delay in filing an appeal against an order passed by the Assistant Commissioner of Service Tax Bangalore. The Tribunal found no delay in the filing of the appeal and rejected the application seeking condonation of the delay.

2. Imposition of penalty under Section 76 of Finance Act 1994:
The appellant filed a stay application seeking waiver and stay of the penalty of Rs. 2,10,203/- imposed under Section 76 of the Finance Act 1994 by the original authority. The penalty was imposed after the Assistant Commissioner demanded service tax and interest for a specific period. The delay in filing the appeal led to its rejection by the appellate authority, which is now challenged before the Tribunal. The Tribunal noted that the penalty amount was paid with interest after the original authority's decision. The key issue was whether the penalty imposed under Section 76 was sustainable.

3. Maintainability of appeal:
The Tribunal observed that the appeal itself may not be maintainable, which is a prima facie view. The question of maintainability will be discussed further at the final hearing stage. The Tribunal highlighted that the entire service tax amount with interest was paid after the original authority's adjudication, leaving the penalty under Section 76 as the main point of contention.

4. Applicability of Section 80 of Finance Act 1994:
The appellant argued for setting aside the penalty under Section 76 citing Section 80(2) of the Finance Act 1994. The Tribunal, after hearing arguments from both sides, found the provision inapplicable, leading to the rejection of the prayer for waiver and stay of the penalty.

5. Waiver and stay of penalty:
Ultimately, the Tribunal rejected the stay application and directed the appellant to predeposit the entire penalty amount within six weeks. The appellant was instructed to report compliance to the Dy. Registrar by a specified date, with the Dy. Registrar further required to report to the Bench.

In conclusion, the judgment dealt with various issues such as the delay in filing the appeal, imposition of penalty under Section 76, maintainability of the appeal, applicability of Section 80, and the waiver and stay of the penalty. The Tribunal rejected the application seeking condonation of delay, found the appeal not maintainable prima facie, and directed the appellant to predeposit the penalty amount within a specified timeframe.