2015 (1) TMI 900 - HC - Service Tax

Waiver of the pre-deposit - violation of Sections 67 and 68 of the Finance Act read with Rules 6 and 7 of the Service Tax Rules, 1994 - Held that - CESTAT has not recorded any reason on the merit of the said application except on the technicalities. Admittedly, the Assessing Officer passed an order after rejecting an application for adjournment and have proceeded to decide the matter ex parte. The order of the Assessing Authorities before the CESTAT is to be decided upon taking note of all materials available on the record or legally permissible to be brought on record and, therefore, the CESTAT ought to have recorded its finding on the merit and more particularly within the provisions contained under Section 35F of the Central Excise Act. The CESTAT should record its finding on the prima facie case as well as on the balance of convenience and inconvenience and the irreparable loss and injury to be caused to the petitioner and shall also take into account the interest of the Revenue at the time of passing any order on the waiver of the pre-condition deposit. - Court finds that the said order is not sustainable. The order impugned is quashed and is set aside. - Matter remanded back - Decided in favour of assessee.

Issues:
1. Disposal of application seeking waiver of pre-deposit condition by Customs, Excise and Service Tax Appellate Tribunal.
2. Consideration of grounds for granting adjournments and waiver of pre-condition deposit.
3. Lack of reasons recorded by CESTAT on the merit of the application.
4. Compliance with provisions of Section 35F of the Central Excise Act in passing orders.
5. Quashing of the impugned order and directions to CESTAT for reconsideration.
6. Lack of detailed findings in the impugned order.

Analysis:

1. The judgment revolves around the disposal of an application seeking waiver of the pre-deposit condition by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The petitioner was directed to remit the substantive service tax assessed and interest liability, excluding the penalty component, within a specified timeframe.

2. The issue of granting adjournments and waiver of the pre-condition deposit was extensively discussed. The petitioner claimed that the authorities proceeded hastily without granting sufficient time for collating documents. The CESTAT's decision to disallow the waiver was based on the petitioner's failure to refute the show cause notice's averments and the absence of a formal application for filing additional evidence.

3. The High Court noted that the CESTAT failed to record reasons on the merit of the application, focusing solely on technicalities. It emphasized the importance of considering all materials available or permissible to be brought on record, as required under Section 35F of the Central Excise Act.

4. The judgment highlighted the lack of detailed findings in the impugned order, leading the Court to quash the order and set it aside. The CESTAT was directed to reconsider the application, ensuring a thorough examination and recording of reasons in accordance with the law.

5. The Court clarified that its observations in the order should not influence the CESTAT's decision-making process, emphasizing that the CESTAT should independently evaluate the application in compliance with legal requirements.

6. Ultimately, the application was disposed of accordingly, with the High Court refraining from delving into the application's merits, leaving it to be determined by the CESTAT following proper legal procedures.

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