ORDER
S.L. Peeran, Member (J)
1. By this stay application, the appellant seeks for waiver of pre-deposit of penalty of Rs. 100/- for every day during which the failure to make payment of service tax. There was also penalty of Rs. 1000/- for their failure to furnish the ST3 returns. Further penalty of Rs. 12,00,000/- has been imposed under the provisions of Section 78 of the Finance Act, 1994. The appellant is foreign based company having their corporate Headquarters at USA. They have agreement with the Chief Engineer, National Highways, Bangalore for Institutional Development Strategy Study for Karnataka State Highway Improvement Project on 15.5.2000. In terms of Clause I(a) of the agreement, the Chief Engineer, National Highways, Bangalore had requested the assessee to provide certain Consulting Services. In terms of the agreement, the P.W.D. has to pay the service tax. The appellants were under bonafide belief that the service tax has been discharged for Consulting Services by P.W.D. However, PWD did not discharge the duty. The Revenue proceeded to initiate action for levy of penalties. The appellant’s plea has been rejected and penalties have been imposed.
2. The learned Representative relies on the Tribunal’s judgment rendered in the case of Commissioner of Central Excise, Bhubaneshwar v. Tyazhpromexport 2005 (157) ELT 576 (Trib.) wherein in identical circumstances penalty imposed by the Original Authority on Foreign based Company was set aside by the Commissioner and the Revenue’s appeal was rejected by the Tribunal’s Calcutta Bench.
3. The learned DR relies on the ruling of the Tribunal rendered in the case of Trans (India) Shipping Pvt. Ltd. v. Commissioner of Central Excise, Chennai wherein the penalty imposed has been confirmed.
4. We have carefully considered the submissions made by both the sides. We find that from the Tribunal’s ruling relied on by the learned DR deals with Customs House Agent based in India while in the present case, the Company is based in USA and offering Consultancy Services. The agreement clearly indicates that the service tax will be discharged by P.W.D., but they had failed on their part to discharge the service tax. When this has been noticed by the appellants, they have discharged the service tax. Prima facie, the ratio of the ruling rendered by the Tribunal in the case of Commissioner of Central Excise, Bhubaneshwar v. Tyazhpromexport (supra) applies to the facts of the case wherein in similar circumstances penalty imposed on Foreign based Company was set aside. The stay application is allowed by granting waiver of pre-deposit of the amount and staying its recovery till the disposal of the appeal.
5. The learned Representative submits that since the issue is covered, the appeal is to be taken up for out of turn hearing. The prayer is accepted. The matter to come up for hearing on 28th June 2007.
(Pronounced and dictated in the open court)