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2015 (4) TMI 564 - HC - Central ExciseWaiver of pre deposit - Section 35F - assessee is a proprietary concern. After the death of the father, son is running the said concern - held that - Though the substituted Section appears to be prospective in nature certainly the intention behind it cannot be ignored. The original proprietor is dead. His son is levied with these taxes. He is not carrying on any business. Under these circumstances justice of the case would be met by depositing 50% instead of the entire amount as directed by the Tribunal. - Decided partly in favour of assessee.
Issues:
Challenge to Tribunal's order rejecting waiver of pre-deposit under Section 35F of the Central Excise Act, 1944. Analysis: The appellant, a manpower supplier to MESCOM, disputed whether the entire amount paid by MESCOM should be considered as service charges or only the 5% claimed by the appellant. Authorities demanded service tax on the entire amount due to non-payment for almost five years. The appellant appealed the decision, seeking waiver of the pre-deposit amount. The Tribunal dismissed the waiver application, requiring the appellant to deposit the full tax amount within eight weeks. The appellant challenged this order. During the hearing, the appellant's counsel argued that all service charges due were paid, and no service tax was collected from MESCOM. The appellant, a proprietary concern, faced financial difficulties after the death of the original proprietor, now run by his son. The counsel highlighted the recent amendment to Section 35F, which required a deposit of seven and a half percent of the demand. The Court acknowledged the amendment's prospective nature but considered the circumstances, directing the appellant to deposit only 50% of the demand within eight weeks, contrary to the Tribunal's order. In conclusion, the High Court allowed the appeal, modifying the Tribunal's order. The appellant was instructed to deposit 50% of the demand within eight weeks. The Tribunal was directed to proceed with the case on merits and in accordance with the law.
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