2013 (6) TMI 168 - AT - Service Tax

Dismissal of appeal for non compliance of stay order by Commissioner (appeals) - Held that - As the appellate Commission s direction to the assessee to pre-deposit the entire amount of duty has been found to be unreasonable and the assessee s appeal was dismissed without considering the merits and even without offering the appellant an opportunity of being heard, the impugned order is set aside. The present appeal is allowed by way of remand with a request to the Commissioner (Appeals) to dispose of the assessee s appeal (filed against order-in-original) on its merits subject to pre-deposit, by the appellant, of an amount of Rs.1 lakh less the aforesaid amount of Rs.79,378/-.

Summary

Issues:
1. Dismissal of appeal for non-compliance with pre-deposit direction.
2. Justification of pre-deposit amount.
3. Appeal remand for consideration on merits.

Issue 1: Dismissal of Appeal for Non-Compliance with Pre-Deposit Direction:
The original authority confirmed a demand against the appellant, including interest and penalty. The appellant appealed to the Commissioner (Appeals) and requested waiver of pre-deposit, which was denied. The appellate authority directed pre-deposit of the entire duty amount, leading to the dismissal of the appeal for non-compliance with Section 35F of the Central Excise Act. The Tribunal found that the impugned order was not based on merits but on non-compliance with pre-deposit. The key question was whether the appellant should have been directed to make a full deposit. The Tribunal, after examining the facts and circumstances, determined that justice required the appellant to pre-deposit a reduced amount to enable the appeal's consideration on merits.

Issue 2: Justification of Pre-Deposit Amount:
The Tribunal reviewed the appellant's argument that they had already paid a significant amount, which was appropriated towards interest on duty. The appellant contended that the CENVAT credit was not reversed, and the interest amount was not quantifiable at the time of the original order. The Tribunal found the appellate authority's direction for the entire duty amount pre-deposit to be unreasonable. Consequently, the Tribunal set aside the impugned order and allowed the appeal by remanding it to the Commissioner (Appeals) for consideration on merits, with a reduced pre-deposit requirement.

Issue 3: Appeal Remand for Consideration on Merits:
The Tribunal overturned the dismissal of the appeal and remanded the case for the Commissioner (Appeals) to review the appellant's appeal against the original order on its merits. The Tribunal specified a reduced pre-deposit amount for the appellant, taking into account the sum already paid. It emphasized that the appellant should receive a fair opportunity to present their case. The Tribunal also disposed of the stay application in the process.

This judgment highlights the importance of balancing pre-deposit requirements with the need for appeals to be considered on their merits, ensuring that parties are not unduly burdened while still upholding the principles of justice and compliance with legal procedures.