2014 (8) TMI 979 - HC - Service Tax

Waiver of pre deposit - discrepancy between the gross taxable value shown in the ST-3 return and the receipt shown in the balance-sheet - Held that - Since the Tribunal has exercised discretion in waiving 75% of the demand, this Court does not find any ground warranting interference with such discretionary order. However, considering the consequences for non-compliance of the conditions imposed in the impugned order, this Court extends the time for deposit of 25% of the duty imposed upon the petitioner till four weeks from date. - Decided conditionally in favour of assessee.

Summary

Issues:
1. Challenge to order imposing demand before appellate authority.
2. Application for stay of demand before appellate authority.
3. Tribunal's decision on waiver of pre-deposit condition.
4. Petitioner's contention on financial conditions for granting waiver.
5. Court's review of Tribunal's discretionary order on waiver.
6. Extension of time for deposit of demand.

Analysis:

1. The petitioner challenged the order imposing the demand before the appellate authority, which directed the deposit of 50% of the demand as a condition for granting the stay. Non-compliance led to dismissal of the appeal. The petitioner then approached the CESTAT and applied for stay of the demand, which was disposed of by the impugned order.

2. The Tribunal found that an arguable case existed and directed the petitioner to deposit 25% of the demand, waiving the remaining amount until the appeal's disposal. The petitioner's advocate argued for total waiver due to a prima facie case. However, the Tribunal considered the benefit claimed by the assessee and the lack of production of a work order related to Service Tax by the petitioner.

3. The Tribunal's decision to grant a 75% waiver was upheld by the Court, noting that it was not unreasonable or unjustified. The Court found no grounds for interference with the discretionary order. However, the Court extended the time for depositing 25% of the duty imposed on the petitioner to four weeks from the date of the judgment.

4. The petitioner contended that the Tribunal should have considered financial conditions for granting a waiver. The Tribunal's decision was based on the arguable case made out by the petitioner, and it did not find that the 25% deposit condition would cause undue hardship, considering the financial stringency.

5. Since the Tribunal exercised discretion in waiving 75% of the demand, the Court did not find any reason to interfere with the order. The Court highlighted the consequences of non-compliance with the conditions imposed in the impugned order and extended the time for deposit to avoid adverse actions by the Tribunal until the matter is decided in accordance with the law.

6. The writ-petition was disposed of with the observations made by the Court, emphasizing no order as to costs. The Court restrained the respondents from taking any steps for the realization of the duty imposed until the Tribunal decides the matter in default of the deposit specified in the judgment.