2009 (4) TMI 79 - AT - Service Tax

Air travel agents - demand on the gross value of the commission collected - submitted that if they had opted to pay service tax as a percentage of the basic fare, their liability would be Rs.10,41,517/-. The appellants have already deposited an amount of Rs.2 lakhs - liability indicated by the apelalnt is correct as reflected in the impugned order therefore, appellants offer to pay the balance amount within a period of four weeks, is accepted - stay granted

Summary

Issues: Application for waiver of pre-deposit of service tax, penalty under various sections of the Finance Act, interest for delay in payment.

Waiver of Pre-Deposit of Service Tax:
The case involved an application for waiver of pre-deposit of service tax, penalty, and interest. The appellants, air travel agents, sought relief as they had failed to indicate their option to pay service tax as a percentage of the basic fare collected by them. The department demanded tax on the gross value of the commission they collected, resulting in a higher liability. The appellants offered to pay the correct liability of Rs.10,41,517/- after depositing Rs.2 lakhs. The Tribunal accepted this offer, waived pre-deposit of the balance dues, and stayed recovery pending the appeal.

Penalties Imposed:
The appellants were facing penalties under various sections of the Finance Act, 1994. A penalty of Rs.1000/- was imposed under Section 77 of the Act, and additional penalties were levied under Sections 76 and 78. The Tribunal acknowledged the correct liability indicated by the appellants' counsel and accepted their offer to pay the balance amount within four weeks. Consequently, the Tribunal waived pre-deposit of the balance dues and stayed the recovery pending the appeal, emphasizing compliance by a specified date.

Interest for Delay in Payment:
Apart from the service tax and penalties, the demand also included interest for the delay in payment of the tax due from the appellants. The Tribunal's decision to waive pre-deposit and stay recovery of the balance dues pending the appeal also covered the interest component. The appellants were directed to report compliance by a specific date, failing which the appeal would stand dismissed without further notice.

This judgment by the Appellate Tribunal CESTAT CHENNAI, delivered by Member (Technical) P. Karthikeyan, addressed the application for waiver of pre-deposit of service tax, penalties under different sections of the Finance Act, and interest for delay in payment. The Tribunal accepted the appellants' offer to pay the correct liability, waived pre-deposit of the balance dues, and stayed recovery pending the appeal, emphasizing the importance of compliance by the specified date to avoid dismissal of the appeal.