2013 (3) TMI 39 - HC - Service Tax

Business of printing & fabrication of readymade advertisement material - imposition of service tax on the goods - Tribunal directed to deposit Rs.7 Lakhs as pre-deposit within a period of eight weeks and further directed to waive off the balance of dues subject to pre-deposit of balance - applicant submits that the Tribunal decided the matter without considering the financial stringency shown in the affidavit in support of the application for interim relief - Held that - While entertaining the appeal, the Tribunal is required to look into the prima facie merit of the case as well as financial condition of the appellant.Further, the Tribunal is required to consider the relevant factor like financial hardship and other relevant facts because the condition of deposit will make the purpose of filing of appeal itself nugatory. Appeal is partly allowed - The order passed by the Tribunal is modified to the extent that in case the appellant deposits 10% of the assess amount as pre-deposit for entertaining the appeal within a period of three months from today, the Tribunal shall consider the appeal on merit and decide it, expeditiously, in accordance with law.

Summary

Issues:
1. Appeal against imposition of service tax on goods by Assessing Authority.
2. Application for waiver of pre-deposit under Section 30(g) of the Service Tax Act, 1994.
3. Tribunal's order directing pre-deposit of Rs.7 Lakhs and waiver of balance dues.
4. Allegation of arbitrary and illegal manner in directing the pre-deposit.
5. Judicial exercise of power of stay and application of sound principles.
6. Applicability of judgments in similar cases for exercising discretion.
7. Consideration of prima facie merit and financial condition of the appellant.
8. Modification of Tribunal's order for pre-deposit and expeditious decision on appeal.

Analysis:
1. The appellant, engaged in printing & fabrication of advertisement material, appealed against the imposition of service tax on goods by the Assessing Authority. The appeal, along with an application for waiver of pre-deposit, was filed before the Tribunal.

2. The Tribunal, after hearing both parties, directed the appellant to deposit Rs.7 Lakhs as pre-deposit within eight weeks and waived off the balance of dues subject to pre-deposit of the remaining amount during the pendency of the appeal. The appellant challenged this order, alleging that the Tribunal did not consider the financial stringency and bank account details provided in support of the application for interim relief.

3. The appellant argued that the power of stay should be judicially exercised, emphasizing the need for a proper application of sound principles and not passing routine orders. Citing various judgments, including those of the Apex Court and the High Court, the appellant stressed the importance of considering prima facie merit and financial condition while deciding on waiver cum stay applications.

4. Considering the peculiar facts and circumstances of the case, the Court partly allowed the appeal and modified the Tribunal's order. The appellant was required to deposit 10% of the assessed amount as pre-deposit within three months for the Tribunal to consider the appeal on merit and decide it expeditiously in accordance with the law.

This detailed analysis highlights the legal journey of the case, focusing on the issues raised, the arguments presented, and the ultimate modification of the Tribunal's order by the High Court.