2010 (3) TMI 814 - HC - Service Tax

Pre-deposit for entertaining the appeal - respondent shows that the petitioner had not shown any financial difficulties that stand in the way of remitting the entire amount. They have also stated that the petitioner has collected service tax amount on the gross value charged by them but have remitted only part of it to the Exchequer. Hence the Tribunal held that the petitioner should be directed to deposit the entire demanded - Held that - petitioner be directed to deposit 50% of the disputed amount writ petition is disposed of

Summary

Issues: Challenge to Tribunal's order for pre-deposit, applicability of Section 11D, consideration of prima facie case by Tribunal, interference with Tribunal's discretion, direction for deposit, stay of balance disputed amount.

Analysis:
1. Challenge to Tribunal's order for pre-deposit: The petitioner challenged the Tribunal's order directing them to deposit the entire demanded amount for entertaining the appeal. The petitioner argued that the consideration received for sale of materials is outside the purview of Section 11D, citing relevant judgments. The petitioner sought quashing of the Tribunal's order and disposal of the appeal on merits without insisting on the pre-deposit condition.

2. Applicability of Section 11D: The petitioner contended that the demand for the entire amount was not in line with the judgments citing that consideration received for sale of materials falls outside the purview of Section 11D. The petitioner argued that the demand itself lacked authority of law. The petitioner sought setting aside of the first respondent's order and staying the pre-deposit condition to proceed with the appeal.

3. Consideration of prima facie case by Tribunal: The petitioner claimed that the Tribunal had not considered the prima facie case made out by them on the merits of the claim or the applicability of the time limit under Section 11A to the provisions of Rule 223A of the Central Excise Rules. The petitioner sought interference with the Tribunal's decision and requested the Court to set aside the order for pre-deposit.

4. Interference with Tribunal's discretion: The Court acknowledged that the discretion exercised by the Tribunal cannot be interfered with lightly. However, considering the prima facie case made out by the petitioner, the Court directed the petitioner to deposit 50% of the disputed amount within two weeks. The Court emphasized the interest of the Revenue and instructed the Tribunal to expedite the appeal process upon the partial payment.

5. Direction for deposit and stay of balance disputed amount: In the final decision, the Court disposed of the writ petition with the observation that the petitioner should deposit 50% of the disputed amount within a specified time frame. The Court ordered a stay on the balance disputed amount until the appeal is resolved. No costs were awarded, and the connected MP was closed as a consequence of the judgment.