2015 (6) TMI 162 - HC - Service Tax

Waiver of pre deposit - Mandatory pre deposit - whether the petitioner would have to deposit the amount of 7.5% of the tax confirmed against him, as a condition for pursuing the appellate remedy before the Tribunal - Held that - Petitioner, in whose case also the lis commenced in 2013, would not be required to deposit the amount of 7.5%, as required pursuant to the 2014 amendment, and in that respect, he would have an efficacious alternate remedy before the Tribunal where he can file an appeal, together with an application for waiver of pre-deposit and stay of recovery of the amounts confirmed against him by Ext.P1 order. At the time of filing the appeal, he will not be required to make any payment as a pre-condition for the hearing of the waiver application by the Tribunal. I, therefore, relegate the petitioner to the alternate remedy available under the Finance Act, 1994, as amended, of approaching the Appellate Tribunal by way of an appeal against Ext.P1 order. It is made clear that the appeal to be filed by the petitioner would be governed by the statutory provisions, as they stood prior to the amendment introduced with effect from 16.08.2014. - Decided against assessee.

Summary

Issues: Challenge against Ext.P1 order confirming service tax and penalty, availability of alternate remedy through appeal before Customs, Excise and Service Tax Appellate Tribunal, requirement of depositing 7.5% tax amount for appeal, interpretation of law prevailing at the time of suit institution.

Analysis:
1. The writ petition challenged Ext.P1 order confirming service tax and penalty against the petitioner. The court noted that the petitioner had an effective alternate remedy by filing an appeal before the Customs, Excise and Service Tax Appellate Tribunal as per the Finance Act, 1994.

2. The petitioner argued that a recent amendment required depositing 7.5% of the tax amount confirmed as a precondition for maintaining the appeal. The court considered this argument and examined the requirement for depositing the said amount for pursuing the appellate remedy before the Tribunal.

3. The court referred to a Division Bench judgment of another High Court, which indicated that the right of appeal is governed by the law prevailing at the time of suit institution. Since the petitioner's case commenced in 2013, the court held that the petitioner was not obligated to deposit the 7.5% amount as per the 2014 amendment. The petitioner was directed to approach the Appellate Tribunal for filing an appeal without the pre-deposit requirement.

4. The court clarified that the appeal filed by the petitioner would be governed by the statutory provisions existing before the 2014 amendment. The petitioner was permitted to file an appeal with an application for waiver of pre-deposit and stay of recovery of the amounts confirmed in Ext.P1 order.

5. It was emphasized that if the petitioner files a valid appeal under the pre-amendment provisions of the Finance Act, 1994, the Appellate Tribunal must consider the waiver application and proceed with the appeal on its merits. The writ petition was dismissed, allowing the petitioner to pursue the alternate remedy of appeal without the pre-deposit requirement.

This detailed analysis of the judgment highlights the court's interpretation of the law, the petitioner's right to appeal, and the application of relevant legal provisions in the case.