2011 (7) TMI 648 - AT - Service Tax

Deposit of duty pending appeals - non compliance of 35F appeal dismissed - Held that - Appellant has paid the service tax demand as directed by the Commissioner (Appeals), though belated. We remand the matter back to the Commissioner (Appeals) to pass an order on merit after giving reasonable opportunity to the appellant to present their case without insisting any further pre-deposit.

Summary

Issues:
1. Compliance with stay order by the appellant before the Commissioner (Appeals).
2. Waiver of pre-deposit of interest and penalty.
3. Failure to comply with provisions of Section 35F of the Central Excise Act, 1944.
4. Remand of the matter back to the Commissioner (Appeals) for passing an order on merit.

Compliance with stay order by the appellant before the Commissioner (Appeals):
The appellant had filed an appeal before the Commissioner (Appeals) and was directed to make a pre-deposit of disputed service tax demand by a specified date. However, the appellant failed to comply with this directive, leading to the dismissal of the appeal for non-compliance. Subsequently, the appellant paid the service tax demand as directed, albeit belatedly. Upon perusal of the records, it was noted that the appellant had eventually complied with the stay order. Consequently, the Tribunal waived the requirement of pre-deposit of interest and penalty levied on the appellant.

Waiver of pre-deposit of interest and penalty:
Since the appellant had ultimately fulfilled the stay order by paying the service tax demand, the Tribunal decided to waive the necessity of pre-deposit of interest and penalty that had been imposed on the appellant. This decision was based on the appellant's compliance with the Commissioner (Appeals)'s directive, even though it was delayed.

Failure to comply with provisions of Section 35F of the Central Excise Act, 1944:
The Tribunal observed that the appellant's non-compliance with the provisions of Section 35F of the Central Excise Act, 1944 was due to the dismissal of the appeal by the Commissioner (Appeals) solely on procedural grounds, and not on the merits of the case. As a result, the matter was remanded back to the Commissioner (Appeals) for a fresh consideration on merit, with the directive to provide the appellant with a reasonable opportunity to present their case without the need for any further pre-deposit.

Remand of the matter back to the Commissioner (Appeals) for passing an order on merit:
Given that the Commissioner (Appeals)'s order was not based on the merits of the case but on procedural grounds, the Tribunal decided to remand the matter back to the Commissioner (Appeals) for a fresh adjudication on merit. The appellant was to be given a fair opportunity to present their case without being required to make any additional pre-deposit. Consequently, the appeal was allowed by way of remand, and the stay application was disposed of accordingly.