2013 (10) TMI 812 - AT - Service Tax

Saty application - Waiver of pre deposit - Held that - Tribunal not inclined to grant total waiver of the pre-deposit of penalty imposed under Section of the Act since the petitioner had collected service tax from its service recipients but failed to remit the same to the credit of Revenue - Accordingly, we grant waiver of pre-deposit of penalty and stay all further proceedings pursuant to the adjudication order on the condition that petitioner remits the balance service tax liability assessed plus interest thereon, and in addition remits 25% of the penalty assessed under Section 78 of the Act, within four weeks from today and reports compliance on 16.9.2013. In default, there shall be failure of pre-deposit and consequently the appeal shall stand dismissed.

Issues:
1. Confirmation of service tax liability, interest, and penalties.
2. Imposition of penalty under Section 78 of the Act.
3. Waiver of pre-deposit of penalty.
4. Conditions for granting waiver and stay of proceedings.

Confirmation of Service Tax Liability, Interest, and Penalties:
The adjudicating authority confirmed a service tax liability of Rs.46,36,744/- and directed the recovery of interest under Section 75, along with the imposition of penalties under Sections 77(1) and 78 of the Act. The petitioner had remitted Rs.44,17,569/- out of the total service tax liability before the issuance of the show cause notice. It was revealed that the petitioner had collected service tax from clients but failed to deposit it with the Revenue due to changes in the Board of Directors. The Commissioner (Appeals) upheld the decision, leading to the current appeal.

Imposition of Penalty under Section 78 of the Act:
The petitioner argued against the imposition of a penalty equivalent to the service tax liability under Section 78, citing the early remittance of a significant portion of the tax amount before the show cause notice. Despite this, the Tribunal noted that the petitioner had collected service tax but failed to deposit it with the Revenue. Consequently, the Tribunal did not grant a total waiver of the pre-deposit of the penalty but considered the early remittance as a mitigating factor.

Waiver of Pre-Deposit of Penalty:
Although the Tribunal did not completely waive the pre-deposit of the penalty imposed under Section 78, it granted a waiver subject to conditions. The petitioner was required to remit the balance of the service tax liability assessed, along with interest, taking into account the amount already remitted. Additionally, the petitioner had to pay 25% of the penalty assessed under Section 78 within four weeks and report compliance by a specified date. Failure to meet these conditions would result in the dismissal of the appeal.

Conditions for Granting Waiver and Stay of Proceedings:
The Tribunal granted a waiver of the pre-deposit of penalty and stayed further proceedings on the condition that the petitioner fulfilled certain requirements. These conditions included remitting the remaining service tax liability, paying interest, and a percentage of the penalty within a specified timeframe. The petitioner was directed to report compliance by a set date, failing which the appeal would be dismissed. The Tribunal's decision was communicated to the petitioner's counsel in court, ensuring awareness of the obligations under the order. Additionally, a miscellaneous application for early hearing was dismissed as unnecessary.

← Previous Next →