Tribunal orders Rs.50,000 deposit with penalty waiver upon compliance. Stay on balance penalty pending appeal.

The Tribunal directed the applicant to deposit Rs.50,000 within four weeks, with the remaining penalty amount waived upon compliance. Recovery of the balance penalty was stayed pending appeal resolution.

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Issues: Application for waiver of predeposit of penalty under Section 78 of the Finance Act, 1994.

Analysis:
1. The applicant filed an application seeking waiver of predeposit of penalty amounting to Rs.4,56,000 imposed under Section 78 of the Finance Act, 1994.
2. The applicant was providing services categorized as 'renting of immovable property' and collected Rs.4,51,035 between June 2007 and March 2009. The tax was paid post an investigation by Central Excise authorities, leading to confirmation of tax demand, interest, and an equivalent penalty.
3. The applicant's counsel argued that the tax along with interest was paid before the show-cause notice was issued. Reference was made to a case where the Supreme Court held that no penalty should be imposed in the case of a retrospective amendment of levy.
4. The opposing party contended that the cited case law was not applicable here as the tax was collected but not deposited, and the deposit was made only after detection by central excise officers.
5. Upon reviewing the submissions, the Tribunal found that there was no dispute regarding the tax levy, and the applicant had collected tax without depositing it initially. The deposit was made post issuance of summons and investigation by the Department. Consequently, the Tribunal directed the applicant to deposit Rs.50,000 within four weeks, with the remaining penalty amount waived upon compliance. Recovery of the balance penalty was stayed pending appeal resolution.

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