2016 (6) TMI 1126 - HC - Service Tax

Levy of service tax - maintainability of writ petition - applicability of judgment in Paul Merchants Ltd. v. Commissioner of C.Ex. Chandigarh 2012 (12) TMI 424 - CESTAT DELHI (LB) . - Held that - Distinguishable features made out by the Commissioner is based on facts. - Paul Merchants case is required to be followed if otherwise ratio is applicable. The appreciation of facts essentially required in this matter. The appropriate remedy in this circumstances is for the petitioner to redress appellate remedy. This Court under Article 226 of the Constitution cannot sit upon the order of the Commissioner to act like an appellate authority and appreciate the facts which has been pointed out. With regard to the payment of pre-deposit of 7.5% this proceedings is essentially before the amendment to the Finance Act 2014. Therefore the Tribunal has necessary power to consider the waiver application. Therefore the Tribunal shall consider the waiver application in the light of Paul Merchants case. Decided against the petitioner.

Summary

Issues:
Impugned order passed by the Commissioner of Central Excise and Customs not following the direction in a previous judgment of the High Court. Petitioner challenging liability to pay service tax and penalty based on previous judgment. Commissioner passing an order with distinguishable features from the previous judgment. Petitioner seeking remedy through Article 226 of the Constitution. Applicability of pre-deposit requirement and waiver application.

Analysis:
The petitioner in this case challenged the order of the Commissioner of Central Excise and Customs, contending that the Commissioner did not adhere to the direction provided in a previous judgment of the High Court. The petitioner invoked Article 226 of the Constitution, citing a previous case where the Court held that the adjudicating authority must follow the decision of a Larger Bench of the appellate Tribunal. The Court emphasized that unless there are factual or legal grounds for departure, the Commissioner is bound by the previous judgment and directed a reconsideration of the matter in light of the previous case.

In response, the Commissioner passed the impugned order, detailing distinguishable features between the previous judgment and the current case. The petitioner argued that the Commissioner's attempt to differentiate the cases lacked factual basis and was an unfounded bypass of the law. The Court, however, noted that the Commissioner's distinctions were fact-based and that the proper course of action for the petitioner was to seek redress through appellate remedies rather than expecting the Court to act as an appellate authority.

Regarding the pre-deposit requirement, the Court highlighted that the proceedings were before an amendment to the Finance Act, 2014, giving the Tribunal the authority to consider waiver applications. The Court directed the petitioner to approach the appellate authority to challenge the impugned order and instructed the appellate authority to consider the waiver application in line with the previous judgment. Coercive actions against the petitioner were deferred for three months to allow for the exploration of alternative remedies.

In conclusion, the Court disposed of the writ petition by directing the petitioner to pursue appellate remedies, emphasizing the need for proper redress through the appellate process and the consideration of waiver applications in accordance with the relevant legal principles established in previous judgments.