2013 (3) TMI 607 - HC - Service Tax

Waiver of pre-deposit - tribunal has ordered a deposit of 50% of the tax due in its order 2014 (1) TMI 508 - CESTAT MUMBAI - The contention of the Appellant is that the entirety of the proceeds consist of what is realized from a purely a trading activity namely sale of vehicles and no service has been provided. - Held that - At this stage, prima facie, it would not be either appropriate or proper for the Court to enter upon a disputed factual issue particularly in view of the fact that a prima facie view on the facts has been taken by the Tribunal. No financial hardship was shown. Hence, having regard to the parameters of the jurisdiction of this Court under Section 35(G) of the Central Excise Act, 1944, we do not find any error in the order of the Tribunal requiring a pre-deposit of 50% of the tax liability. - No relief - Decided against the assessee.

Summary

Issues:
1. Appeal against order of CESTAT for waiver of pre-deposit due to Service Tax demand.
2. Classification of activities as Business Auxiliary Services for liability to discharge Service Tax.
3. Contention of the Appellant regarding the nature of the proceeds from trading activity.
4. Jurisdiction of the High Court under Section 35(G) of the Central Excise Act, 1944 for interference in the Tribunal's order.

Analysis:

1. The appeal before the High Court arose from an order of the CESTAT concerning an application for waiver of pre-deposit due to a Service Tax demand. The Tribunal had evaluated the facts and classified the activities undertaken by the appellant, leading to a decision to require a 50% deposit of the tax due.

2. The Tribunal determined that the appellant's activities, including sales promotion and advertising, fell under the category of Business Auxiliary Services as defined in Section 65(19) of the Finance Act, 1994. The Tribunal noted the absence of evidence showing discharge of Service Tax liability by the appellant, leading to the conclusion that the appellant was liable to pay Service Tax on the consideration received for such activities.

3. The Appellant contended that the proceeds solely arose from a trading activity, namely the sale of vehicles, without the provision of any services. However, the High Court refrained from delving into the disputed factual issue at that stage, especially considering the prima facie view taken by the Tribunal. The Court noted the absence of evidence of financial hardship and upheld the Tribunal's decision to require a 50% pre-deposit of the tax liability.

4. In light of the jurisdiction conferred upon the High Court under Section 35(G) of the Central Excise Act, 1944, the Court found no error in the Tribunal's order necessitating a pre-deposit of 50% of the tax liability. Consequently, the Court dismissed the appeal, but extended the time for deposit by an additional four weeks, as per the order.

In conclusion, the High Court upheld the Tribunal's decision regarding the pre-deposit requirement for the Service Tax demand, emphasizing the classification of activities as Business Auxiliary Services and the Court's limited jurisdiction to interfere in such matters under the relevant legal provisions.