2016 (5) TMI 308 - AT - Service Tax

Condonation of delay - delay of 48 days in filing the appeal - Appellant contended that delay was occured due to misplacement of the copy of O-I-O - Commissioner (Appeals) rejected the appeal observing that he has no power to condone the delay beyond the period of 30 days - Held that - it does not appear to be a deliberate lapse on the part of the appellants. It is further found that the delay has been adequately explained. Therefore, there is a good case on merit in favour of the appellant. Accordingly, the delay is condoned and the COD application is allowed for extending consionable justice to the appellant. Disallowance of abatement claim and imposition of service tax - Held that - it is relevant to notice the findings of the ld.Commissioner as given in Order-in-Original, under similar facts and circumstances, dropped the proposed demand, for the material components and allowed the abatement. Accordingly, agreeing with the findings of the ld.Commissioner (Appeals), the impugned order is set aside. Imposition of penalty - Rule 7(C) of Service Tax Rules, 1994 read with Section 70 of the Act - Held that - the penalty is reduced to ₹ 10,000/-. Penalties imposed under Sections 76 & 78 of the Act, are set aside. Also the appellant is required to deposit the amount of ₹ 20,000/- to the Prime Minister s Relief Fund within a period four weeks from the date of receipt a copy of this Order and file compliance report. - Decided in favour of appellant with consequential relief

Summary

Issues:
Late filing of ST-3 Returns, Delay in submitting half yearly service tax return, Delay in payment of service tax, Claiming abatement without proper mention, Imposition of penalties, Delay in filing appeal, Power to condone delay, Merit of the case, Condonation of delay, Abatement claim, Conditions for availing abatement, Cenvat credit, Benefit of notifications, Reduction of penalties, Imposition of costs.

Late Filing of ST-3 Returns:
The appellant, a service provider, was found to have filed ST-3 Returns for October 2011 to March 2012 late, with a delay of 255 days. Additionally, there was a delay in submitting the half yearly service tax return for April 2011 to September 2011. The service tax was also paid late, leading to a proposed demand of tax along with interest and penalties under various sections.

Claiming Abatement without Proper Mention:
The appellant claimed abatement for the material component without specifying the relevant Notification numbers. The Revenue proposed to disallow the abatement claim and impose service tax for the Financial Year 2011-12. Penalties were also suggested for late filing of ST-3 Returns.

Delay in Filing Appeal and Power to Condone Delay:
The appellant filed an appeal with a delay of 48 days, attributing it to misplacement of the Order-in-Original copy. The Commissioner (Appeals) rejected the appeal, citing a lack of power to condone delays beyond 30 days. The delay was further extended to 50/51 days before the Tribunal.

Merit of the Case and Condonation of Delay:
The appellant argued for the condonation of delay, emphasizing the merit of the case based on subsequent favorable judgments. The delay was explained due to health reasons of the advocate initially engaged for the appeal. The Tribunal, considering the explanation and merit of the case, condoned the delay to provide justice to the appellant.

Conditions for Availing Abatement and Benefit of Notifications:
The Tribunal reviewed the findings of a similar case where the demand was dropped, allowing abatement of 75% of the gross value for the same service. The conditions for availing abatement were analyzed, including the sale of completely constructed flats, inclusion of material costs in flat prices, and non-availment of Cenvat credit. The appellant was found to fulfill the conditions for benefiting from the relevant notifications.

Reduction of Penalties and Imposition of Costs:
The penalties imposed under various sections were set aside, with the penalty under Rule 7 (C) of Service Tax Rules, 1994 being reduced. A cost of Rs. 20,000 was imposed, to be deposited to the Prime Minister's Relief Fund within a specified timeframe.

Conclusion:
The appeal was allowed, setting aside the impugned order and granting the appellant consequential benefits. The penalties under Sections 76 & 78 of the Act were annulled, with a reduced penalty under Rule 7 (C) of Service Tax Rules, 1994. A cost was imposed, requiring compliance within a specified period. The Tribunal emphasized the fulfillment of conditions for availing abatement and the benefit of relevant notifications, ensuring justice and relief to the appellant.