2015 (8) TMI 1009 - HC - Service Tax

Waiver of pre deposit - Financial hardship - Held that - Except the demand raised in this matter, other facts in the present appeal and the one decided by this Court are one and the same and there is no dispute in this regard. The issues raised in this appeal are also no different from the one decided by this Court in 2015 (8) TMI 1010 - MADRAS HIGH COURT . It is to be noted that the demand raised in this matter with regard to the cenvat credit on tower and shelter material is ₹ 10,39,78,568/- and with regard to the cenvat credit on input services related to towers and shelters - Partial stay granted.

Issues:
1. Tribunal's reliance on Bombay High Court decision over jurisdictional High Court's decisions.
2. Consideration of financial hardship in ordering pre-deposit.
3. Justification of the Tribunal's direction for a specific pre-deposit amount.
4. Assessment of prima facie case for total waiver of pre-deposit.
5. Legality and sustainability of the Tribunal's order.

Issue 1:
The appellant challenged the Tribunal's decision, questioning the correctness of ignoring their jurisdictional High Court's decisions in favor of a Bombay High Court ruling. The High Court noted a similar case where it had modified the pre-deposit ordered by the Tribunal, considering the appellant's financial hardship. The Court emphasized the need to balance undue hardship faced by the appellant with safeguarding the interests of the Revenue, as per Section 35-F of the Act. The Court referred to a Supreme Court decision emphasizing the importance of not causing excessive hardship to the appellant.

Issue 2:
The High Court examined the appellant's plea of financial hardship, highlighting the appellant's substantial accumulated loss. The Court acknowledged the financial difficulty faced by the appellant and the undue hardship in pursuing the appeal while making the ordered pre-deposit. Citing legal provisions, the Court emphasized the need to consider undue hardship and impose conditions to protect the Revenue's interests when ordering pre-deposit amounts.

Issue 3:
Regarding the specific pre-deposit amount ordered by the Tribunal, the High Court reviewed the appellant's case related to Cenvat credit on tower and shelter materials and input services. The Court found merit in the appellant's case concerning the credit on input services, indicating a prima facie case. Consequently, the Court modified the pre-deposit amount, requiring the appellant to deposit a reduced sum in installments, with a stay on collecting the balance amount during the appeal's pendency.

Issue 4:
The Court assessed whether the Tribunal was correct in holding that the appellant did not establish a prima facie case for a total waiver of pre-deposit. By considering the appellant's financial hardship and the legal provisions governing pre-deposit requirements, the High Court found that the Tribunal's decision was not justified. The Court emphasized the importance of balancing undue hardship and Revenue protection when determining pre-deposit amounts.

Issue 5:
The High Court evaluated the legality and sustainability of the Tribunal's order in light of the issues raised by the appellant. Finding similarities between the present appeal and a previous case, the Court modified the pre-deposit amount, aligning with its earlier decision. The Court emphasized the need to consider the appellant's financial situation and the legal provisions governing pre-deposit requirements to ensure a fair and balanced outcome.

In conclusion, the High Court addressed various issues raised by the appellant concerning the Tribunal's order for pre-deposit. By considering the appellant's financial hardship, the legal provisions, and the balance between undue hardship and Revenue protection, the Court modified the pre-deposit amount, providing relief to the appellant while ensuring the interests of the Revenue were safeguarded.

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