2013 (11) TMI 1546 - HC - Service Tax

Validity of Tribunal s order - Whether the judgment and order of the learned Tribunal is legally sustainable when the element of hardship though pleaded has not been decided at all - Held that - element of undue hardship required to be considered under Section 35(A) of the Central Excise Act, 1944, has not been considered at all. We also find a flaw in the judgment and order of the learned Tribunal when it decides the merit of the case. The legal provision of granting interim relief in this sort of matter is somewhat different from the civil proceedings. In a case of civil proceedings, the prima facie case, balance of convenience and irreparable injury are the legal requirements to be considered. Of course, in a case of this nature, strong prima facie has been considered to be a technical hardship. The Hon ble Supreme Court has also explained this legal position. But, the interim relief can only be granted when the Tribunal will find that there is an undue hardship either actual or technical. This element has not been considered at all. We, therefore, set aside the impugned judgment and order of the learned Tribunal and direct the learned Tribunal to rehear the matter. - Decided in favour of assessee.

Summary

Issues:
Whether the judgment and order of the learned Tribunal is legally sustainable when the element of hardship though pleaded has not been decided at all.

Analysis:

Issue 1: Consideration of Undue Hardship under Section 35(A) of the Central Excise Act, 1944

The Court observed that the element of undue hardship required to be considered under Section 35(A) of the Central Excise Act, 1944, had not been addressed by the Tribunal in the impugned judgment and order. It was noted that the legal provision for granting interim relief in such matters differs from civil proceedings, where factors like prima facie case, balance of convenience, and irreparable injury are considered. The Court emphasized that in cases like this, interim relief can only be granted upon finding undue hardship, whether actual or technical. Since this crucial element was not taken into account by the Tribunal, the Court set aside the impugned judgment and directed the Tribunal to rehear the matter.

Issue 2: Production of Material Supporting Financial Hardship

The appellant's counsel highlighted that material supporting financial hardship had not been presented before the Tribunal. The Court, acknowledging this, permitted the appellant to produce the necessary material within a fortnight from the date of receipt of the order. Furthermore, the Court directed the Tribunal to decide on this matter within four weeks from the receipt of the order, emphasizing that the earlier findings and observations of the Tribunal would not hold influence since they had been set aside by the Court.

Conclusion

In conclusion, the appeal was disposed of, and any pending miscellaneous petitions were closed without costs. The Court's decision focused on the importance of considering undue hardship under the relevant legal provisions and ensuring that all necessary materials supporting financial hardship are presented and considered during the proceedings. The judgment emphasized the need for a thorough reevaluation of the case by the Tribunal, taking into account the elements of hardship as required by law.