2013 (11) TMI 101 - AT - Service Tax

Waiver of pre deposit - Section 35F - Held that - appellant had been directed to make pre-deposit of entire service tax demand confirmed along with interest. The said order does not record any reason for order the pre-deposit except that the appellant had not led any evidence that ordering pre-deposit would cause financial hardship. As held by the Hon ble High Court of Bombay in the case of CEAT Ltd. 1999 (4) TMI 81 - HIGH COURT OF BOMBAY & Velcord Textiles 1999 (2) TMI 77 - HIGH COURT OF JUDICATURE AT BOMBAY and also as clarified by the CBE&C in Circular dated 06/04/2000, the appellate authority has to record a finding and pass a speaking order while considering stay applications - these directions have not been followed. Therefore, the matter has to go back to the lower appellate authority for consideration afresh. Accordingly, we remand the case back to the Commissioner (Appeals) to pass either a speaking order on pre-deposit to be made by the appellants or pass the order on merits on the points raised in the appeal - Decided in favour of assessee.

Summary

Issues:
1. Non-compliance with Section 35 F of the Central Excise Act, 1944 regarding pre-deposit.
2. Lack of reasoning in the order for pre-deposit.
3. Requirement of speaking orders for stay applications as per legal precedents and circulars.

Analysis:
1. The appeal was directed against an Order-in-Appeal that dismissed the appellant's appeal due to non-compliance with the provisions of Section 35 F of the Central Excise Act, 1944. The appellant, a cooperative bank, was required to make a pre-deposit of the entire confirmed service tax amount along with interest, which was not fulfilled leading to the dismissal of the appeal.

2. The appellant argued that the order for pre-deposit lacked reasoning, citing legal precedents and circulars emphasizing the necessity for the appellate authority to provide detailed reasons when ordering pre-deposit. The appellant contended that without proper application of mind and justification, such orders are not legally sustainable. The appellant requested either a speaking order on pre-deposit or a disposal of the appeal on its merits.

3. The Tribunal acknowledged the appellant's argument and observed that the order for pre-deposit did not contain sufficient reasoning as required by legal standards. Referring to the directives from the Hon'ble High Court of Bombay and the Circular issued by the Central Board of Excise and Customs (CBE&C), the Tribunal emphasized the importance of recording findings and passing speaking orders while considering stay applications. Consequently, the Tribunal remanded the case back to the Commissioner (Appeals) for a fresh consideration, instructing to either provide a speaking order on pre-deposit or decide the appeal on its merits.

In conclusion, the Tribunal allowed the appeal by way of remand, highlighting the necessity for proper reasoning and adherence to legal standards in matters concerning pre-deposit and stay applications.