2008 (8) TMI 256 - AT - Service Tax

Appellant has already paid the service tax amount after issue of SCN and penalty subsequently - appellant being a small service provider and located in a small town near Ahmedabad, there is a possibility that they did not have clear legal knowledge and therefore the delay in filing the appeal amounting to 97 days is condoned appellant submits that there is a mistake in calculation on the part of Revenue while calculating the tax liability -he submits that if the calculation is correctly made, the interest liability also would have been discharged stay granted

Summary

Issues: Delay in filing appeal, condonation of delay, calculation error in service tax liability, stay against recovery of interest

Delay in filing appeal:
The appellant, a small-scale labor contractor, filed an appeal after a delay of 97 days due to the employee's lack of legal knowledge and subsequent realization of the need to file an appeal only when the Department demanded the penalty amount. The appellant's advocate argued that the delay was unintentional, emphasizing the strong case. The Revenue contended that the delay should not be condoned, citing a Tribunal decision. The Member (T) acknowledged the appellant's circumstances, considering their location in a small town and lack of legal knowledge. Consequently, the delay in filing the appeal was condoned.

Condonation of delay:
The Tribunal, after considering the circumstances explained by the appellant's advocate, decided to condone the delay of 97 days in filing the appeal. The appellant had already paid the service tax amount and penalty, showing a willingness to comply despite the delay. The Tribunal recognized the appellant's situation as a small service provider in a small town near Ahmedabad, where legal knowledge might be limited. The Member (T) found the reasons for delay acceptable and granted condonation.

Calculation error in service tax liability:
The appellant's advocate pointed out a mistake in the Revenue's calculation of the service tax liability, suggesting that the penalty amount would decrease accordingly. The advocate argued that with the correct calculation, the interest liability would also be discharged. However, the Tribunal noted that this aspect would be addressed during the final hearing. Despite the calculation error, the appellant had already paid the duty and penalty, leading to the grant of a stay against the recovery of interest during the appeal's pendency.

Stay against recovery of interest:
Although the stay application was not listed for hearing on the day, the Tribunal considered the appellant's payment of duty and penalty, except for interest. The appellant's advocate highlighted a calculation error in the service tax liability, leading to a potential reduction in the penalty amount. Acknowledging that the interest liability would be addressed later, the Tribunal granted a stay against the recovery of interest while the appeal was ongoing.