2014 (12) TMI 589 - AT - Service Tax

Waiver of pre-deposit of Service Tax, interest and penalty - Manpower Recruitment or Supply Agency Service - Held that - In view of the fact that the factory is taken over by the Bank and further leased to M/s. Rajaram Bapu Patil SSK Ltd. Prima facie the applicant had made out a case for total waiver of dues. The pre-deposit of dues are waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Waiver of pre-deposit of Service Tax, interest, and penalty.

Condonation of Delay:
The applicant sought condonation of delay in filing the appeal, citing receipt of the order-in-appeal on 29-10-2012 and filing the appeal on 22-1-2013. The applicant explained that their factory was taken over by a bank in 2006 and subsequently leased to another entity. The Tribunal found no delay in filing the appeal due to the circumstances presented by the applicant regarding the change in ownership and operation of the factory.

Waiver of Pre-deposit of Service Tax:
The applicant also applied for the waiver of pre-deposit of Service Tax, interest, and penalty amounting to &8377; 28,39,348. The demand was based on the provision of Manpower Recruitment or Supply Agency Service to a specific entity. The applicant argued that after the bank took over their factory and leased it to another entity, they did not provide any such service as claimed by the revenue department. The Tribunal considered the transfer of the factory to the bank and its subsequent lease to another entity, concluding that the applicant had a valid case for total waiver of dues. As a result, the pre-deposit of dues was waived, and the recovery of the same was stayed during the appeal's pendency, with the stay petition being allowed.

In summary, the Tribunal ruled in favor of the applicant regarding both the condonation of delay in filing the appeal and the waiver of pre-deposit of Service Tax, interest, and penalty. The circumstances surrounding the change in ownership and operation of the factory played a crucial role in the Tribunal's decision to grant relief to the applicant, acknowledging the impact of these changes on the alleged provision of services and the financial obligations in question.