2015 (9) TMI 890 - HC - Service Tax

Waiver of pre deposit - Best Judgment assessment - Section 72 - Failure by the Appellant to furnish complete particulars despite repeated opportunities - Held that - Returns in Form ST-3 filed online by the Appellant was rejected by the computer on the ground of some error and was not re-filed till after a Show Cause Notice was issued to the Appellant on 18th October, 2012 - Court finds that the Appellate has raised serious objections against the order of the CC on merits. In particular, the Appellant is aggrieved by the manner in which inferences were drawn by the CC with respect to the details furnished by it. The Court is of the view that contention of the Assessee that it did furnish the full particulars requires a detailed examination on merits. - pre deposit of ₹ 78 lakhs as ordered by the CESTAT is harsh and in the interests of justice a sum of ₹ 25 lakhs should instead be directed to be paid by the Appellant as pre-deposit - Partial stay granted.

Summary

Issues:
1. Challenge against pre-deposit requirement by CESTAT.
2. Best judgment assessment invoked by Commissioner of Customs.
3. Failure to furnish complete particulars by the Appellant.
4. Objections raised against the order of the Commissioner of Customs on merits.
5. Assessment of pre-deposit amount by the Court.

Analysis:
1. The appeal was initially against the order requiring the Appellant to make a pre-deposit of Rs. 78 lakhs by the Customs, Excise & Service Tax Appellate (CESTAT). Subsequently, the CESTAT dismissed the appeal due to the Appellant's failure to make the pre-deposit within the granted time. An amended memo of appeal was filed challenging this dismissal.

2. The Commissioner of Customs held that the best judgment assessment under Section 72 of the Finance Act was applicable to assess the service tax for 2011-12 against the Appellant. The Commissioner confirmed a demand of Rs. 1,55,71,202/- along with a penalty, citing the Appellant's failure to provide complete particulars despite opportunities.

3. The Appellant's online filed returns were rejected due to errors, and they were not re-filed until after a Show Cause Notice was issued. The Appellant objected to the manner in which inferences were drawn by the Commissioner regarding the details provided, claiming to have furnished full particulars.

4. The Court acknowledged the Appellant's serious objections against the Commissioner's order on merits, especially regarding the inferences drawn. The Court deemed it necessary to examine in detail the contention that the Appellant did provide complete particulars.

5. Considering the Appellant's annual turnover and other factors, the Court found the pre-deposit amount of Rs. 78 lakhs ordered by the CESTAT to be harsh. In the interest of justice, the Court directed the Appellant to pay Rs. 25 lakhs as a pre-deposit instead. The impugned orders of the CESTAT were set aside, and the appeal was restored for disposal on merits upon the Appellant depositing the revised sum by a specified date.