2015 (11) TMI 1491 - AT - Service Tax

Waiver of pre deposit - delay in issue of show-cause notice - management, maintenance or repair service - Held that - There is absolutely no evidence to show that there were efforts to find out their liability over a period of five years. It has to be noted that contrary to the claim of the appellant, the prejudice has been caused to the Revenue because thee delay in issue of show-cause notic has compelled the Revenue to issue show-cause notice only from 2006 whereas if the notice were to be issued earlier probably earlier period could have also been covered. Therefore delay in issue of show-cause notice has not caused any prejudice to the appellant. The general principle is that even ignorance of law cannot be an excuse but in this case even after the legal position was brought to their notice, for a period of five years till the notice was issued appellants did not do anything. Further, organization like C-DIT was set up by Government should be a model to others as far as compliance with law is concerned. Unfortunately, in this case the appellant has not been able to show any efforts made by them to ensure full compliance with the legal provisions and no evidence was shown to us in this regard. - appellant has not been able to make out a case on limitation or on tax to be paid in respect of four services which have been considered and in respect of these four services itself the amount directed to be deposited earlier may not cover more than half the liability of service tax and interest. - Partial stay granted.

Summary

Issues:
1. Liability of the appellant to pay service tax on various services.
2. Invocation of the extended period for tax assessment.
3. Challenge against the dismissal order and stay application.
4. Consideration of the defense regarding service provider-service receiver relationship.
5. Compliance with legal provisions and efforts made by the appellant for full compliance.

Analysis:
1. The appellant, a registered society owned by the Government of Kerala, was found liable to pay service tax on additional services beyond what they were registered for. The demand for service tax, along with penalties, was confirmed for the period 2006-07 to 2010-11.

2. The Tribunal initially directed the appellant to deposit a certain amount, which was not complied with, leading to the dismissal of the appeal. However, the High Court set aside this order, emphasizing the need to reconsider the issue of time bar and prima facie case by the Department.

3. Following the High Court's directions, the Tribunal restored the appeal and stay application for further consideration, focusing on the time bar claimed by the appellant and the imposition of penalties.

4. The appellant argued that certain services provided to the Government of Kerala should not be taxable due to the perceived unity between the appellant and the government. However, the Tribunal found that the appellant failed to demonstrate efforts towards compliance and verification of their tax liability, leading to a direction to deposit a significant amount to cover part of the service tax liability.

5. Despite the appellant's contentions, the Tribunal emphasized the lack of evidence showing proactive steps taken by the appellant to ensure compliance with tax laws. The Tribunal directed the appellant to deposit a specified amount within a given timeframe, with the possibility of waiving the pre-deposit of the remaining dues during the appeal process, subject to compliance.