2015 (10) TMI 2152 - AT - Service Tax

Waiver of Pre-deposit of penalty under Section 77 & 78 of Finance Act, 1994 Petitioner contends that service tax liability was discharged before the issue of SCN and there was no intention whatsoever to evade payment of Service Tax Further contends that there was a misunderstanding of the conditions mentioned in the contract on payment of Service Tax leading to a delay in payment of the same and offers to make some payment at this stage Held That - Deposit of certain amount at this stage seems reasonable and same would waive balance dues and its recovery stayed during the pendency of the Appeal Stay granted conditionally.

Summary

Issues: Application for waiver of pre-deposit of penalty under Section 78 and Section 77 of the Finance Act, 1994.

Analysis:
1. The petitioner sought waiver of pre-deposit of a penalty amounting to Rs. 2.89 Crores under Section 78 and a penalty of Rs. 5,000 under Section 77 of the Finance Act, 1994. The petitioner's representative explained that the Service Tax and interest had already been paid before the show cause notice was issued. It was argued that the delay in payment was due to a misunderstanding of the contract conditions regarding Service Tax. The representative offered to deposit Rs. 5.00 Lakhs at that stage.

2. The Revenue's representative supported the findings of the Commissioner. The Tribunal noted that the issue of intentional evasion of Service Tax needed to be assessed based on the evidence presented before the adjudicating authority. Considering the circumstances, the Tribunal found the offer to deposit Rs. 5.00 Lakhs reasonable. The Tribunal directed the applicant to deposit this amount within eight weeks, and upon such deposit, the balance dues would be waived, and recovery stayed during the appeal's pendency. Non-compliance with the deposit directive would lead to the dismissal of the appeal without further notice. The compliance report was scheduled for 16.11.2015.