2011 (2) TMI 764 - AT - Service Tax

Waiver of pre-deposit - The contention of the Revenue is that the applicant filed return under Rule 7 of the Rules - When the Revenue pointed out certain discrepancies, the applicants filed revised return after a lapse of 11 months and as per the rules, the revised return is be filed within 60 days - Held that - The provision of Rule 7C of the Rules, the revised return cannot be ignored simply on the ground that the same has been filed after a period provided under Rule 7B of the Rules - Thus, the matter requires re-consideration by the adjudicating authority in view of the provision of Rule 7C of the Rules - The appeal is allowed by way of remand.

Summary

Issues:
1. Waiver of pre-deposit of service tax amount, interest, and penalty based on the revised return filed after the prescribed period under Rule 7B of the Service Tax Rules, 1994.
2. Interpretation and application of Rule 7C of the Service Tax Rules, 1994 in relation to the filing of revised returns and the consequences of delay.

Analysis:
1. The applicant sought a waiver of pre-deposit of service tax, interest, and penalty amounting to Rs. 1,28,576 based on the contention that the revised return was not considered by the lower authority due to being filed after the prescribed period under Rule 7B of the Service Tax Rules, 1994. The applicant argued that Rule 7C provides for penal action for not filing the return within the stipulated period under Rule 7. The Tribunal noted that the revised return should be filed within 60 days from the original return submission, as per Rule 7B. However, Rule 7C outlines the consequences for delayed submission of the prescribed return, emphasizing that the revised return cannot be ignored solely based on the filing timeline provided under Rule 7B. Consequently, the Tribunal set aside the impugned order, waiving the pre-deposit and remanding the matter for reconsideration by the adjudicating authority in light of Rule 7C.

2. The Revenue contended that the applicant filed the revised return after an 11-month lapse, beyond the 60-day period stipulated under Rule 7B. The Revenue argued that this delay rendered the impugned demand sustainable. However, the Tribunal, in its analysis, highlighted the provisions of Rule 7C, which specify the amounts to be paid for delays in furnishing the prescribed return. Notably, Rule 7C provides for penalties based on the duration of delay, with a cap on the total payable amount. The Tribunal emphasized that the adjudicating authority must reconsider the matter, considering the provisions of Rule 7C and offering the appellant an opportunity for a fresh hearing. Ultimately, the Tribunal allowed the appeal by way of remand, emphasizing the importance of adhering to the procedural requirements outlined in the Service Tax Rules, 1994.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Bangalore underscores the significance of procedural compliance, the interpretation of relevant rules, and the consequences of delayed filing of revised returns in matters concerning service tax liabilities.