TMI Blog2009 (5) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... the bona fide doubt regarding their activity whether covered by service tax or not, therefore, there was a reasonable cause on their part in not depositing the service tax in time. Therefore, we are of the view that notwithstanding anything contained in the provisions of Section 76 and Section 77 of the Finance Act, 1994, the appellants are entitled for the benefit of the Section 80 of the Finance Act, and accordingly, we hold that no penalty should be imposed on the appellants. - ST/461 & 470/2008 - 629-630/2009 - Dated:- 19-5-2009 - Shri T.K. Jayaraman, Member (Technical) and Shri M.V. Ravindran, Member (Judicial) (Final Order Nos. 629-630/2009 dt. 19.5.2009 certified on 17.6.2009 in Appeal Nos. ST/461 470/2008) Shri Mohe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Tax rate was 5% and in the second period, the rate of Service Tax was 8%. Taking into account, the value of the services rendered during the above two periods, the Service Tax liability for the two periods were calculated at Rs.60,92,708/- and Rs.77,75,753/-, respectively. The assessee is a laboratory under the Council of Scientific and Industrial Research, which is also a part of the Ministry of Science and Technology. They take up research and development works in various branches of science. They had classified their R D projects as under on the basis of instructions received from their headquarters. (a) Sponsored Projects (b) Collaborative Projects (c) Grant-in-aid Projects, (d) Composite Projects. Consequent to the investigation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Many public funded research institutions receive grants or aids from the Government for conducting research/ project work. Whether such activities would be covered under the levy? In the facts of this case, no service is rendered to anyone. Hence the question of payment of Service Tax does not arise. However, if they render service to anyone on payment basis, service tax will be payable on such services. 6.1 In terms of the above clarification, the Commissioner has examined each and every project involving grant-in-aid and had given relief. However, in respect of the following projects, the Commissioner found that they would not be satisfying the conditions of the Board's letter. They are as fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above, the party is required to pay Service Tax of Rs.66,32,596/- as detailed at para 23 above and Service Tax of Rs.13,52,074/- in case of Grant-in-aid projects, which are not eligible for exemption from payment of Service Tax. Hence, the total service tax liability is Rs.79,84,670/-. However, I propose to appropriate an amount of Rs.61,73,714/- paid by M/s. IICT. As regards imposition of penalty, I find that non-payment of service tax has happened during the initial period of introduction of new levy. There was a bona fide doubt about the chargeability of Service Tax on the activities rendered by them. IICT is also a premier research institution of the country, being a constituent laboratory of Council Scientific and Industrial Resea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y provided assistance and review in basic design criteria, including design loads for all projects components including engineering calculations, estimates of main equipment capacities and sizes to M/s GCHPL and charged fees from the clients. The lower authorities have held that the appellants have rendered drawing, design, technical, consultancy services and are covered by the scope of consulting engineers and accordingly demanded Service Tax. The appellants have not contested the levy of service tax. They have co-operated with the investigating officers. Since they were under the bona fide doubt regarding their activity whether covered by service tax or not, therefore, there was a reasonable cause on their part in not depositing the servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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