2015 (2) TMI 434 - AT - Service Tax

Waiver of pre deposit - Airport services - Sale of tickets for visitors at IGI Airport - AAI allowed collection of service tax w.e.f. 02.03.2005 - Held that - Prima facie, we are of the view that as per the decision of the Tribunal in the case of P.C. Paulose, 2007 (12) TMI 128 - CESTAT, BANGALORE the activity of sale of tickets for visitors is not leviable to service tax. Therefore as there are contrary views in that case, allegation and suppression cannot be alleged against the applicants. In these circumstances, extended period of limitation is not invokable. Therefore, prima facie, the applicant has made out a good case for complete waiver of pre-deposit. Accordingly, we waive the pre-deposit and stay the recovery of impugned adjudicated liability during the pendency of the appeal. - Stay granted.

Summary

Issues:
1. Maintainability of the appeal due to limitation period.
2. Liability of the applicant to pay service tax for the period in question.
3. Validity of invoking the extended period of limitation.
4. Request for waiver of pre-deposit.

Issue 1: Maintainability of the appeal due to limitation period
The Revenue contended that the appeal filed by the applicant was beyond the limitation period, making it non-maintainable. However, the Tribunal observed that since the appeal was filed in March 2013 and was still pending adjudication for a stay application, the Revenue was directed to file a petition by a specified date. As the Revenue failed to do so, the Tribunal proceeded to consider the stay application based on the receipt of the impugned order on 06.02.2013, within the limitation period.

Issue 2: Liability of the applicant to pay service tax
The applicant, engaged in selling tickets at the airport, did not collect service tax during a specific period due to a dispute regarding the taxability of services provided at the airport. The applicant started paying service tax from a later date when allowed by the Airport Authority. The Revenue initiated proceedings against the applicant for the period in question, leading to a demand for service tax, interest, and penalties. The applicant sought waiver of pre-deposit, arguing a bona fide belief that the activity was not taxable during the disputed period.

Issue 3: Validity of invoking the extended period of limitation
The applicant's counsel argued that the extended period of limitation should not apply as there was a genuine belief that the activity was not subject to service tax during the disputed period. Referring to a Tribunal decision and subsequent higher court rulings, the counsel contended that the applicant's belief was reasonable. The Tribunal, considering the conflicting views on taxability, held that the extended limitation period was not applicable, thus supporting the waiver of pre-deposit.

Issue 4: Request for waiver of pre-deposit
The Departmental Representative opposed the waiver, asserting that the applicant had received payments during the disputed period and was liable to pay service tax. However, the Tribunal, based on the precedent and the genuine belief of the applicant, granted a complete waiver of pre-deposit and stayed the recovery of the adjudicated liability during the appeal's pendency. The Tribunal found that the activity of selling tickets for visitors was not subject to service tax based on the precedent cited, supporting the waiver decision.