2014 (12) TMI 39 - HC - Service Tax

Waiver of pre deposit - Whether in the facts and circumstances of the case, the CESTAT is right in not considering the fact that the appellant s bona fides are proved by the fact that the appellant had paid service tax on flats sold to third parties even prior to the introduction of explanation to Section 65(105)(zzzh) w.e.f. 1-7-2010 and therefore the benefit of waiver of pre-deposit ought to be given to the appellant - Held that - As on the date when the application was disposed of on 31-12-2013, it was not the first hearing and the case was heard earlier. According to the assessee, the case was adjourned for the purpose of furnishing certain materials. However, the nature of such materials is not placed before this Court. Be that as it may the reason assigned for non-appearance on 31-12-2013, prima facie appears to be genuine in the absence of any rebuttal for the same. Considering the above fact and also the contention that the assessee has already paid a sum of ₹ 83,44,454/- out of the total demand, we deem it appropriate that the assessee should be given an opportunity to place all the materials before the Tribunal. It also appears that the Department representative who appeared before the Tribunal had not placed before the Tribunal, the amounts paid by the assessee prior to the issuance of the show cause notice as claimed by the assessee in the application seeking stay/waiver of pre-deposit. - Matter remanded back - Decided in favour of assessee.

Issues:
1. Appeal against order passed by Customs, Excise, and Service Tax Appellate Tribunal.
2. Demand for Service Tax, interest, and penalty.
3. Application for waiver of pre-deposit and stay.
4. Non-appearance of assessee before the Tribunal.
5. Substantial questions of law raised by the assessee.
6. Consideration of materials and payments made by the assessee.
7. Decision on remitting the matter back to the Tribunal.

Analysis:
1. The appeal was filed against the Tribunal's order demanding Service Tax, interest, and penalty under specific sections of the Finance Act. The penalty imposed was later reduced to 25% of the service tax demanded. The assessee also sought waiver of pre-deposit and interest.
2. The Tribunal directed the appellant to pre-deposit the entire amount of service tax demanded due to non-appearance of the assessee during the hearing. The assessee challenged this order, raising substantial questions of law regarding the Tribunal's conclusions and considerations.
3. The assessee contended that they had paid a significant portion of the total demand prior to investigation, which was not considered by the Tribunal. The appellant argued that they had paid service tax on sales even before the relevant legislative amendment.
4. The High Court considered the circumstances leading to the non-appearance of the assessee and found the reason genuine. It was noted that the Department representative did not present all relevant information regarding payments made by the assessee before the show cause notice.
5. The Court allowed the Civil Miscellaneous Appeal, setting aside the impugned order and remitting the matter back to the Tribunal for a fresh consideration of the application for waiver of pre-deposit and stay on merits. The Court emphasized the need for all materials to be presented before the Tribunal for a fair assessment.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the case and the High Court's decision to remit the matter back to the Tribunal for further consideration.

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