Government Department Granted Condonation for Late Appeal, Exempted from Service Tax Liability

The Appellate Tribunal CESTAT Chennai granted condonation of a 1802-day delay in filing an appeal by a Government department, citing the need for approvals and a mistaken belief that another appeal covered the issue. Relying on a Mumbai Tribunal decision on an exemption order, the delay was condoned, and the appeal allowed based on the exemption exempting Security Agency Service. The Tribunal set aside the impugned order. Despite the Revenue's argument for service tax liability on security agency services under the Finance Act, the Tribunal found no tax liability on the appellant, allowing the appeal based on the exemption granted by the Government.

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Issues: Condonation of delay in filing appeal, liability to pay service tax on security agency service

Condonation of Delay in Filing Appeal:
The appellant filed an application for condonation of delay of 1802 days in filing the appeal against the Order-in-Original No. 67/2009 dated 28.10.2009. The appellant, a Government department, cited the need for prior approval from higher authorities and consideration by the Ministry of Home Affairs as reasons for the delay. It was argued that the delay was not deliberate but due to the impression that an appeal filed against a different order would cover the issue in the impugned order. The appellant relied on a Tribunal decision from Mumbai where a similar delay was condoned based on an ad hoc exemption order exempting Security Agency Service. The Tribunal, following the same ratio, condoned the delay and allowed the appeal, setting aside the impugned order.

Liability to Pay Service Tax on Security Agency Service:
The Revenue argued that as per the definitions in the Finance Act, the appellant's provision of security agency service falls under the purview of service tax liability on the charges collected from industrial undertakings belonging to the Government of India. However, the Tribunal, considering the appellant's reliance on the exemption order and the decision in the Mumbai case, concluded that there was no tax liability on the appellant for providing Security Agency Service. Therefore, the impugned order was set aside, and the appeal was allowed based on the exemption granted by the Government.

This judgment from the Appellate Tribunal CESTAT Chennai dealt with the condonation of delay in filing an appeal and the liability to pay service tax on security agency service. The appellant, a Government department, sought condonation of a 1802-day delay in filing the appeal, attributing it to the need for approvals and the impression that another appeal covered the issue. Relying on a Mumbai Tribunal decision regarding an exemption order, the appellant argued for condonation, which was granted by the Tribunal based on the exemption order exempting Security Agency Service. The Tribunal set aside the impugned order and allowed the appeal. The Revenue contended that the appellant was liable to pay service tax on security agency services based on the Finance Act definitions. However, the Tribunal, following the Mumbai case and the exemption order, found no tax liability on the appellant and allowed the appeal, citing the exemption granted by the Government.

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