2013 (11) TMI 1509 - HC - Service Tax

Restoration of appeal dismissed by the CESTAT for failure to comply with conditional stay order - appellant submits that as the appellant has deposited the entire amount as demanded by the revenue, though after the time period fixed by the Tribunal, the lapse on the part of the appellant may be condoned - negligence - Held that - The plea that the Chartered Accountant retained by the Municipal Corporation did not pursue the appeal, did not absolve officers of the Municipal Corporation from seeking information relating to the appeal, but as the Municipal Corporation has deposited the amount determined by the CESTAT and the matter in dispute involves public funds, the appeal is allowed, impugned order is set aside and the appeal is restored to the CESTAT - appeal restored - decided in favor of appellant.

Summary

Issues: Appeal against order dismissing appeals for failure to comply with pre-deposit order by CESTAT.

Analysis:
The appellant, a Municipal Corporation, Karnal, filed an appeal against an order dated 16.04.2013 by CESTAT, dismissing its appeals for failure to comply with the pre-deposit order of Rs. 4,54,230/-. The appellant had been directed by the adjudicating authority to pay the said amount along with interest and penalty, which was later upheld by the Commissioner of Central Excise (Appeals) Gurgaon. The Tribunal allowed the application for staying recovery subject to the deposit of the specified amount, which the appellant failed to comply with, resulting in the dismissal of the appeal by CESTAT.

The counsel for the Municipal Corporation argued that despite the delay, the entire demanded amount had been deposited, seeking condonation of the lapse and restoration of the appeal to CESTAT for fresh consideration. It was contended that the delay was due to the negligence of the private Chartered Accountant engaged by the Corporation. On the other hand, the revenue's counsel opposed the restoration, citing negligence on the part of the Corporation and arguing against rewarding such behavior.

Upon hearing both parties and examining the facts, the High Court observed that while the appellant had deposited the required amount belatedly, the negligence of the Chartered Accountant did not absolve the Corporation of its responsibility to ensure compliance. However, considering the public funds involved, the Court allowed the appeal, set aside the impugned order, and restored the matter to CESTAT. The Court directed the Municipal Corporation to conduct an inquiry into the lapses and fix responsibility.

Therefore, the Court directed the parties to appear before the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, on 23.09.2013 for further proceedings in the matter.