2014 (6) TMI 894 - HC - Service Tax

Waiver of pre deposit - Photographic Service - Held that - The appellant is ready and willing to make a pre-deposit of ₹ 30.00 lakhs as against ₹ 70.00 lakhs and would further submit that since the appellant is having a great chance of success in the appeal, which was dismissed for non-compliance of conditional order of pre-deposit dated 26-8-2013 by the Tribunal, the Tribunal may be directed to restore the appeal on its file and dispose of the same on merits. - Decided conditionally in favour of assessee.

Summary

Issues:
1. Taxability of services provided by the appellant under the Finance Act, 1994.
2. Appellant's appeal regarding pre-deposit requirement by the Tribunal.
3. Dismissal of the appeal by the Tribunal for non-compliance.

Analysis:

1. The appellant was engaged in supplying cinematography equipment on hire basis and registered for service tax under new entry 65(105)(zzzzj) of the Finance Act, 1994. However, the Service Tax Authorities contended that services provided by the appellant before 16-5-2008 were taxable under different entries, leading to demands for tax along with interest and penalties. The appellant appealed to the CESTAT, which directed a pre-deposit of Rs. 70.00 lakhs for admission of appeal, subsequently allowing stay on collection of dues during the appeal.

2. The appellant challenged the pre-deposit order before the High Court, raising substantial questions of law regarding the applicability of service tax on transactions already covered under Sales Tax/VAT, the preference between specific and general entries for classification, and the validity of a non-speaking order for pre-deposit. The Tribunal dismissed the appeal for non-compliance with the pre-deposit order, prompting the appellant to file another appeal questioning the dismissal based on pending proceedings.

3. The High Court modified the pre-deposit amount to Rs. 30.00 lakhs and directed the appellant to comply by a specified date. The Court set aside the Tribunal's dismissal order, subject to the appellant's compliance with the modified pre-deposit condition. If the deposit is made, the Tribunal is instructed to restore the appeal and proceed with a disposal on merits. Failure to comply would result in the restoration of the original dismissal order. Additionally, the appellant was permitted to seek unfreezing of bank accounts post-compliance, with a directive to the Tribunal for prompt consideration of such applications. The Court scheduled a compliance report for the specified date.