2012 (8) TMI 815 - AT - Service Tax

Whether debit in the Cenvat Credit Account cannot be considered as pre-deposit - held that - Pre-deposit made by the appellants by way of debiting in Cenvat Credit Account is sufficient for the purposes of fulfilment of requirement of pre-deposit ordered by the ld. Commissioner - Commissioner (Appeals) is directed to hear this matter without insisting on any further deposit

Summary

Issues: Pre-deposit requirement for hearing of appeal before Commissioner (Appeals) - Whether debiting amount in Cenvat Credit Account fulfills pre-deposit condition.

Analysis:
The appellants were directed to deposit Rs. 4,50,000/- as a condition for the appeal hearing before the Commissioner (Appeals). The appellants debited the amount in the Cenvat Credit Account. The ld. Commissioner rejected the appeal, stating that debiting the Cenvat Credit Account does not qualify as a pre-deposit. The appellants argued citing a decision by the Larger Bench that the deposit could be made by debiting the modvat account in RG 23A Part II. The Tribunal found the Larger Bench's decision applicable to the case. The A.R. contended that the deposit under Section 35F of the Central Excise Act is not a duty payment and can be debited from the Cenvat Credit Account, referring to a decision by the Hon'ble Gujarat High Court. However, the Tribunal noted that the High Court decisions did not address the specific issue of debiting the Cenvat Credit Account for pre-deposit. The Tribunal upheld the appellants' argument, setting aside the impugned order and ruling that the pre-deposit made by debiting the Cenvat Credit Account sufficed for the requirement. The Tribunal allowed the stay petition and remanded the matter to the Commissioner (Appeals) for a decision on merit without demanding further deposit, ensuring a fair hearing for the appellants.

In conclusion, the judgment clarified that debiting the Cenvat Credit Account can fulfill the pre-deposit requirement for an appeal hearing, as established by the Larger Bench's decision. The Tribunal emphasized the importance of considering the specific issue at hand rather than relying on general decisions not directly addressing the matter. The ruling ensured that the appellants were given a fair opportunity to present their case on merit before the Commissioner (Appeals) without additional deposit demands.