2012 (6) TMI 50 - AT - Service Tax

Condonation of delay in filing the appeal - appellants have taken over the management of appellant firm - order was received by them was sent to the outgoing management to take proper action but they failed to do so Held that - appellants are liable to pay liability of the appellant firm, therefore, took steps for filing the appeal which caused delay of 30 days in filing the appeal. delay are satisfactory, the application for condonation of delay in filing the is allowed Demand of service tax, penalty and interest - appellants are availing the GTA service and are not paying service tax thereon - appellants are not challenging the liability of service tax and interest Held that - appellants have taken the plea before the adjudicating authority due to financial crisis, they could not deposit the service tax in time and before the Commissioner (Appeals), they have taken another defence plea that as the appellant was pre-occupied with the treatment of his brother for kidney failure. The appellants are not entitled for the benefit of section 80 of Finance Act,1994. option to the appellants to pay 25% of service tax as penalty. penalty under section 78 is confirmed. The penalty under section 76 is dropped as per provision to amended section 78 of the Finance Act, 1994. appeal as well stay petition is disposed of.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Liability for service tax on GTA services.
3. Application of penalty under sections 76 and 78 of the Finance Act, 1994.

Condonation of Delay in Filing the Appeal:
The appellants filed an appeal along with an application for condonation of delay, citing reasons related to a management change causing a delay of 30 days. The Tribunal allowed the application, considering the reasons satisfactory.

Liability for Service Tax on GTA Services:
The case involved the appellants availing GTA services without paying service tax or filing periodical returns. A show cause notice was issued, leading to confirmation of demand, interest, and penalty by the first appellate authority. The appellants did not challenge the liability of service tax and interest but sought relief under section 80 of the Finance Act, 1994. The Tribunal noted the appellants' financial crisis and family medical emergency but denied the benefit of section 80, confirming a penalty equal to the service tax amount.

Application of Penalty under Sections 76 and 78 of the Finance Act, 1994:
The Tribunal observed a narrow issue and proceeded with the appeal after waiving pre-deposit. It was noted that the penalty under section 76 was dropped as per the provision to amended section 78 of the Finance Act, 1994. The appellants were given the option to pay 25% of the service tax as a penalty within thirty days, failing which they would be liable to pay 100% service tax as a penalty. The penalty under section 78 was confirmed, while the penalty under section 76 was dropped.

In conclusion, the Tribunal disposed of the appeal and stay petition, providing detailed reasoning for the decisions on condonation of delay, liability for service tax on GTA services, and the application of penalties under sections 76 and 78 of the Finance Act, 1994.