Custom, Excise & Service Tax Tribunal
M/S. The Guntur Municipal Corporation vs The Commissioner Of Customs And Central ... on 22 July, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, BANGALORE SOUTH ZONAL BENCH COURT - I COD Application No. ST/COD/26248/2013 & Stay Application No. ST/Stay/26249/2013 in Service Tax Appeal No: ST/25948/2013 (Arising out of Order-in-Original No: 23/2012-S.T. (Commnr.) dated 28.3.2012 passed by the Commissioner of Customs and Central Excise, Guntur.) M/s. The Guntur Municipal Corporation Appellant Versus The Commissioner of Customs and Central Excise, Guntur. Respondent
Appearance Mr. Venkateshwara Rao, Advocate for the appellant.
Mr. A.K. Nigam, Additional Commissioner (AR) for the Revenue.
CORAM SHRI B.S.V. MURTHY, HONBLE MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, HONBLE MEMBER (JUDICIAL) Date of Hearing: 22.7.2013 Date of decision: 22.7.2013 FINAL ORDER No._______________________2013 [Order per: B.S.V. Murthy]. The appellant is seeking condonation of delay of 340 days in filing the appeal. The learned counsel submits that a reference had been made by the Secretary, Municipality Administration and Urban Development Department, Andhra Pradesh Government to the Finance Ministry seeking exemption to Municipalities from payment of service tax on renting of immovable properties. Therefore, the appellant-Municipality was waiting for exemption to be granted and when they came to know that such exemption is not forthcoming, they filed the appeal and hence this delay. Having regard to the circumstances, we consider that the condonation of delay can be granted in this case. The learned AR at this stage submits that some cost should be imposed on the appellant for delay in filing the appeal. We consider that this submission is appropriate and the appellant is directed to deposit an amount of Rs.10,000/- for delay in filing the appeal. This amount will be deposited within eight weeks from today and compliance shall be reported to the original adjudicating authority.
2. After hearing both the sides for some time, we find that in this case entire amount of tax with interest has been recovered by the department and the issue is only relating to penalties. In our opinion, it would be appropriate to decide the issue finally instead of deciding the stay at this stage and postponing the final decision. Accordingly, the requirement of pre-deposit of balance dues is waived and the appeal itself is taken up for final decision.
3. Heard both the sides. The demand of service tax is for the period from May 2006 to March 2011 on the services of renting of immovable property and selling of space/advertisement by the appellant-Municipality. The learned counsel does not dispute the liability but submits that the appellant being a Municipality was under a bona fide belief that they were not liable to pay and subsequently when the issue was taken up by the department, they were waiting for exemption to be granted by Central Government. He submits that the appellant is not disputing service tax liability which has already been recovered with interest. The only request is that the penalties imposed under Section 76, 77 and 78 of Finance Act, 1994 should be set aside. Having regard to the fact that Government of Andhra Pradesh was trying to get exemption and appellant is a Municipality, we consider that payment of service tax with interest would meet the ends of justice and there is no need for imposition of penalties. Further, we also consider that the appellant has known reasonable cause for non-payment of service tax and therefore, this is a fit case of provision of Section 80 of the Finance Act, 1994.
4. In the result, the demand for service tax and interest is upheld. Penalties under Section, 76, 77 and 78 of the Finance Act, 1994 are set aside. Appellant is directed to deposit Rs.10,000/- (Rupees Ten Thousand Only) for condoning the delay within eight weeks as directed above and report compliance. The application for condonation of delay, stay application and the appeal gets disposed of in above terms. It is made clear that the order will take effect if only appellant deposits the amount and intimates jurisdictional Additional Commissioner/Deputy Commissioner with proof of payment, the cost imposed for condoning the delay.
(Pronounced and dictated in open Court) (ANIL CHOUDHARY) Member (J) (B.S.V. MURTHY) Member (T) rv 4