2007 (5) TMI 595 - AT - Service Tax

Maintainability of appeal - non-compliance with pre-deposit - non-speaking order - Held that - after the interim order was passed the appellants have approached the Commissioner (A) for modification of the order for recall of the interim order. The said application has not been considered by the Commissioner (A). The Commissioner (A) has got inherent power to recall the interim order - There is no finding with regard to the grounds taken in the interim order. The Commissioner (A) has put the appellants on terms with due application of mind therefore the order is also not a speaking order - matter remanded to reconsider the application filed by the appellants for waiver of pre-deposit and decide the issue in terms of law - appeal allowed by way of remand.

Summary

Issues Involved:
1. Non-compliance leading to dismissal of appeal due to failure to pre-deposit an amount as directed by the Commissioner (A).
2. Request for modification of interim order and consideration of application for recall of the interim order.
3. Interpretation of grounds for appeal related to recovery of Service Tax under "Commissioning and Installation Services" for manufacturing and selling paddy processing machinery.

Analysis:
1. The appeal before the Appellate Tribunal arose from the dismissal of the appeal by the Commissioner (A) for non-compliance with the direction to pre-deposit a specific amount. The appellants contended that they failed to seek a waiver of pre-deposit before the interim order was issued due to inadvertency. Despite filing an application for recall of the interim order, the Commissioner (A) did not consider it, leading to the dismissal of the appeal. The Tribunal noted that the Commissioner (A) has the power to modify an interim order and should have considered the application for recall. The order was deemed not to be a speaking order as it did not address the grounds raised in the appeal.

2. The Tribunal observed that the Commissioner (A) should have considered all the pleas raised by the appellants before passing the interim order. As the application for recall was not addressed, the Tribunal set aside the impugned order and remanded the matter to the Commissioner (A) for reconsideration. The Commissioner (A) was directed to review the application for waiver of pre-deposit and make a decision within four months in accordance with the law. The stay application and appeal were allowed by remanding the case for fresh consideration.

3. The issue at the core of the appeal pertained to the recovery of Service Tax under the category of "Commissioning and Installation Services." The appellants argued that as they were involved in manufacturing and selling paddy processing machinery, which constituted sale of goods, service tax should not have been applicable. This aspect of the case was highlighted during the proceedings, emphasizing the nature of the services provided by the appellants and the applicability of service tax in their specific business context.

In conclusion, the Tribunal's decision focused on procedural irregularities, the Commissioner's failure to consider the application for recall, and the need for a comprehensive review of the case. The judgment provided clarity on the powers of the Commissioner (A) in modifying interim orders and stressed the importance of addressing all grounds raised in appeals before making decisions.