2014 (9) TMI 674 - HC - Service Tax

Restoration of appeal - tribunal dismissed the appeal for non-compliance of order of pre-deposit of 50% amount - Held that - the condition of pre-deposit of 50% of the Service Tax as directed by the Tribunal stands complied with though belatedly. Keeping in view the totality of facts and circumstances, the delay in deposit of the amount is condoned. - Appeal restored before tribunal.

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal and Commissioner of Central Excise regarding non-payment of Service Tax by petitioner and dismissal of appeal by Tribunal for non-compliance.

Analysis:
The writ petition challenged the orders passed by the Tribunal and the Commissioner of Central Excise regarding the non-payment of Service Tax by the petitioner. The petitioner, engaged in construction activities, received a significant amount from a corporation for services rendered without holding a Service Tax registration. A show cause notice was issued for recovery of unpaid Service Tax, which was confirmed along with a penalty by the Assistant Commissioner. The petitioner's appeal was dismissed by the Commissioner, leading to a second appeal before the Tribunal. The Tribunal allowed a partial waiver of pre-deposit, requiring 50% to be paid within a specified time. However, the petitioner failed to comply with the Tribunal's order, resulting in the dismissal of the appeal for non-compliance.

The petitioner contended financial constraints prevented timely payment as directed by the Tribunal. Subsequently, the petitioner deposited an amount covering 50% of the required sum, which was ordered to be kept in safe custody with the Court's Registrar. Upon verification, it was confirmed that the deposited amount satisfied 50% of the Tribunal's directive. The Court, considering the overall circumstances, condoned the delay in deposit and allowed the writ petition. The order of the Tribunal was set aside, and the matter was remitted back to the Tribunal for adjudication on merits in accordance with the law.

This comprehensive analysis highlights the key legal issues surrounding the non-payment of Service Tax, the dismissal of the appeal by the Tribunal due to non-compliance, the financial constraints faced by the petitioner, and the subsequent deposit made to fulfill the Tribunal's directive. The judgment emphasizes the importance of complying with tribunal orders while also considering extenuating circumstances such as financial constraints in the enforcement of tax regulations.