2008 (3) TMI 193 - AT - Service Tax

Appellants are covered under Storage and Warehousing services and Cargo Handling services registration taken only from March, 2004 - bona fide belief that they were not covered under both the services - Revenue has invoked larger period no intention to evade duty since appellants having voluntarily depositing the amount and there is a ground to consider the plea of time-bar, stay is granted

Summary

Issues:
1. Contesting tax liability under time-bar.
2. Imposition of penalties for non-payment of Service Tax.
3. Waiver of pre-deposit of penalty.

Analysis:
1. The appellants, engaged in "Storage and Warehousing services" and "Cargo Handling services," were initially charged with Service Tax for a larger period from 16-8-2002 to 31-3-2005. While they initially paid tax only for cargo handling services, they later admitted liability for storage and warehousing services as well and made the necessary payments. The appellants contested the tax liability under time-bar, arguing that penalties under Sections 76, 77, and 78 should not be levied as they had no intention to evade payment and had voluntarily paid the amounts along with interest. They emphasized their belief that they were not covered under both services during the period in question and cited various evidence to support their case.

2. The Revenue, represented by the learned SDR, contended that since the appellants admitted the liability, penalties were justified. The SDR argued that penalties were a statutory power and had been imposed with due care. The appellants were accused of not contesting the case on merits and not pleading financial hardship, leading to the request for pre-deposit of a certain amount towards penalties.

3. Upon careful consideration, the Tribunal noted the appellants' contestation of the case on time-bar and their evidence demonstrating a bona fide belief regarding their liability. Although the appellants had not registered with the department for the relevant period until March 2004, the Tribunal acknowledged their voluntary payments and decided to grant a waiver of pre-deposit in light of the circumstances. The Tribunal recognized the need to hear the matter promptly due to the substantial demands exceeding Rs. 1.50 crores, including penalties. Consequently, the appeal was scheduled for final hearing on 9th June 2008, with a directive for no recovery of amounts even after 180 days following the judgment on this issue.