2015 (7) TMI 270 - AT - Service Tax

Waiver of pre deposit - Appeal previously dismissed for non compliance with pre deposit order - Held that - Imposing 100% duty and penalty as pre deposit is too harsh a measure, especially when the merits of the issue are not considered. Rejecting the appeal on the ground that appellants have not complied with the said pre deposit order would amount to denial of Justice. It is also noted that the Government in its wisdom have subsequently stipulated 7.5% of the duty and penalty as the pre deposit amount at the first appeal stage. In the present case, the appellants have already paid 10% duty while filing this appeal before this Tribunal. Therefore, it is treated that this 10% duty would be sufficient to hear their appeal on merits by the Commissioner (Appeals). - Matter remanded back - Decided in favour of assessee.

Summary

Issues: Appeal against Commissioner (Appeals) order for non-compliance with pre-deposit; Imposition of 100% duty and penalty as pre-deposit without considering merits of the issue.

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the appeal was filed against the order of the Commissioner (Appeals) rejecting the appeal due to non-compliance with the pre-deposit of duty and penalty. The appellant argued that the Commissioner (Appeals) did not assess the merits of the issue before ordering the pre-deposit, which was deemed a harsh decision. The appellant requested a remand to the Commissioner (Appeals) for a merit-based hearing, indicating that 10% of the duty was already paid while filing the appeal before the Tribunal.

The Authorized Representative had no objection to remanding the matter as long as the appellant did not seek a refund of the 10% duty already paid. The Tribunal observed that the Commissioner (Appeals) had not delved into the merits of the issue despite ordering a 100% pre-deposit of duty and penalty. It was deemed unjust to reject the appeal solely based on non-compliance with the pre-deposit order without considering the merits. The Tribunal highlighted that the Government had set a pre-deposit amount of 7.5% of duty and penalty at the first appeal stage. Given that the appellant had already paid 10% duty, it was considered sufficient for the appeal to be heard on merits by the Commissioner (Appeals).

Consequently, the Tribunal remanded the matter to the Commissioner (Appeals) for a hearing on the appeal without requiring any further deposit, emphasizing the need for a reasonable opportunity for a Personal Hearing to be granted to the appellants. The judgment aimed to ensure a fair consideration of the appeal on its merits without imposing an excessively harsh pre-deposit requirement, aligning with the principles of natural justice and procedural fairness.