2010 (2) TMI 351 - AT - Service Tax

Stay- Recovery of tax- The department is recovering the service tax demanded from the appellant from the service receiver namely ONGC from the payments due to them and consequently the appellant is not in a position to pay salaries to his drivers and he is suffering from serious financial difficulties. It was also submitted that the department has already recovered an amount of Rs. 32,97,000/- in this manner and any bill raised or ONGC is not being honoured but the payments are being made to the department. Taking all these facts into consideration, the stay petition and COD application were listed for hearing today. Held that- appellant was not able to collect the service tax from ONGC as per the submissions made by the learned advocate, and also having regard to the fact that appellant has already undergone considerable difficulties by way of adjustment of bills and the hearing of the stay application getting delayed etc., thus, condone the delay in filing the appeal and take up the stay petition for consideration.

Summary

Issues:
1. Delay in receiving the Order in Original.
2. Condonation of delay for filing the appeal.
3. Stay application due to financial difficulties.
4. Requirement of deposit for granting stay.

Delay in receiving the Order in Original:
The appellant argued that the Order in Original was received late, in November 2009, despite being passed in February 2008. The Revenue presented evidence of delivery through a letter from the Assistant Manager, stating that the order was delivered in March 2008. The appellant contended that the letter was not received, citing health issues and financial difficulties. The Tribunal acknowledged the evidence of delivery but considered the appellant's health, financial situation, and difficulties faced due to delayed hearing, ultimately condoning the delay in filing the appeal.

Condonation of delay for filing the appeal:
The appellant, facing serious financial constraints due to the department recovering service tax from payments owed by ONGC, requested leniency in condoning the delay for filing the appeal. The Revenue opposed, fearing a bad precedent. The Tribunal, considering the appellant's health, financial burden, and exceptional circumstances, decided to allow the condonation of delay, emphasizing the need for an exception in this case.

Stay application due to financial difficulties:
The appellant highlighted financial hardships, including the inability to pay salaries to drivers and difficulties in receiving payments from ONGC. The Tribunal, noting the appellant's large operation and liabilities, directed a deposit of Rs. 50 lakhs within eight weeks, taking into account the previous recovery by the department from ONGC. Failure to comply would result in the disposal of the appeal without further notice, given the time taken for the condonation of delay and stay applications.

This judgment showcases the Tribunal's balancing act between legal requirements and human considerations, emphasizing the need for exceptions in cases of genuine hardship while also upholding procedural integrity and financial obligations for granting stays.