2013 (12) TMI 1471 - HC - Service Tax

Waiver of pre deposit - Bar of limitation - Held that - Tribunal has satisfied that prima facie case has been made out with regard to the period of limitation. Therefore, technically undue hardship has been established. Accordingly, the learned Tribunal granted part relief and made an order of waiver of pre-deposit to the extent of 50% of the tax component and interest thereon and also made a full waiver of the component of penalty. - Tribunal has observed that the question of limitation has to be gone into at the hearing of the appeal, we think, at this stage, it will be true hardship for the appellant to pay the interest component. - Tribunal slightly by waiving full interest component also. However, the rest of the order will remain as it is. This waiver of interest component fully will be applicable provided the appellant executes a bond covering the 50% interest component within a period of seven days from the date of receipt of a copy of this order. This bond shall be executed by the appellant in favour of the Commissioner of Central Excise, Hyderabad-II, binding itself to pay the interest amount fully. - Appeal disposed of.

Summary

Issues:
Waiver of pre-deposit application; Prima facie case of limitation; Undue hardship; Waiver of tax component, interest, and penalty; Modification of Tribunal's order; Execution of bond for waiver of interest component.

Waiver of Pre-deposit Application:
The High Court reviewed the Tribunal's judgment on an application for waiver of pre-deposit. The appellant sought relief from pre-deposit, and the Tribunal granted a partial waiver of 50% of the tax component and interest, along with a full waiver of the penalty component. The Court acknowledged the Tribunal's finding of prima facie case on the limitation issue, establishing undue hardship.

Prima Facie Case of Limitation:
The Tribunal determined that a prima facie case existed regarding the period of limitation, leading to the establishment of undue hardship for the appellant. The Court agreed with this assessment, emphasizing that the question of limitation needed further examination during the appeal hearing.

Waiver of Tax Component, Interest, and Penalty:
The High Court modified the Tribunal's order by waiving the full interest component in addition to the previous waiver of 50% of the tax component and interest, as well as the penalty component. This modification was deemed necessary to alleviate true hardship for the appellant, especially concerning the interest component.

Modification of Tribunal's Order:
The Court slightly adjusted the Tribunal's order to include the full waiver of the interest component, provided the appellant executed a bond covering the 50% interest component within seven days. The bond was required to be in favor of the Commissioner of Central Excise, Hyderabad-II, ensuring the payment of the interest amount in full.

Execution of Bond for Waiver of Interest Component:
To finalize the waiver of the interest component, the appellant was instructed to execute a bond within seven days from receiving the Court's order. This bond was crucial for securing the full waiver of the interest amount and had to be in favor of the Commissioner of Central Excise, Hyderabad-II.

This detailed analysis of the High Court judgment in the case provides insights into the issues of waiver of pre-deposit, prima facie case of limitation, undue hardship, modification of the Tribunal's order, and the execution of a bond for the waiver of the interest component.