BOOTLEGGERS ISLAND Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Lower authorities confirmed a demand of service tax of Rs. 3,08,750/ - against the appellants, a 'Video Production Agency'. The appellants, who were registered with the Department as a 'Video Production Agency' paid about 95% of the above amount before issuance of the relevant show cause notice. The balance amount is Rs. 9,915/ - which is yet to be paid. The authorities have also charged interest amounting to Rs. 50,907/ -, on the total service tax amount for the period of default. They have also imposed a penalty of Rs. 2,58,675/ - under Section 76 and another penalty of Rs. 1,000/ - under Section 77.

(2.) Ld. Counsel for the appellants, arguing for waiver of pre -deposit and stay of recovery in respect of the adjudged dues, submits that the appellants have a strong case on merits. His submission is that the payment of major part of the service lax was itself by mistake, as the service rendered by them was, in fact, not one in the nature of 'Video Tape production' as defined under Section 65(120) of the Finance Act, 1994. As regards penalty, ld. Counsel claims to have a valid challenge on the strength of the Tribunal's decision in Smitha Shetty v. C.C.E., Bangalore . I have heard the Id. SDR also, who opposes the present application.

(3.) After examining the submissions, I find that the payment of a major part of the service tax by the assessee was apparently a voluntary act and that they have not claimed refund of the amount. In the circumstances, the arguments on tax liability are not convincing. As regards interest, however, the assessee seems to have a fairly arguable case on the strength of the cited case law. In the circumstances, they are directed to pre -deposit the outstanding amount of service tax within a period of four weeks and report compliance on 31 -12 -2004. (Dictated and pronounced in open Court)