2016 (1) TMI 484 - HC - Service Tax

Waiver of pre-deposit - Tribunal directed the appellant to deposit entire amount of service tax to entertain the appeal - whether the amount of pre-deposit as directed by the Tribunal was unfair and excessive - works contract - contract of cleaning various parts of M/s Guru Gobind Singh Super Thermal Plant - Held that - Appellant has already deposited 50% of the total tax demand - the present appeal is disposed of by making the interim order dated 15.12.2015 absolute. The Tribunal is directed to hear the appeal on merits without insisting for any further deposit.

Summary

Issues:
Quantum of pre-deposit under Section 35G of the Central Excise Act, 1944 for hearing the appeal by the Tribunal.

Analysis:
The appellant appealed under Section 35G against the order of the Tribunal directing a pre-deposit of the entire service tax amounting to Rs. 4,46,562. The appellant had entered into a cleaning contract with a thermal plant in 2005, where the plant authorities confirmed their activities were not taxable. Despite this, a show cause notice was issued in 2010 demanding service tax. The appellant appealed the demand, which was partially reduced by the Commissioner (Appeals). The Tribunal then directed the appellant to pre-deposit the entire amount. The appellant argued the pre-deposit was excessive, having already paid over 50% of the total demand. The revenue contended the Tribunal's decision was correct. The High Court intervened, noting the appellant had indeed paid over 50% of the demand and directed the Tribunal to hear the appeal on merits without further deposit.

This case primarily dealt with the determination of the pre-deposit amount required for hearing an appeal under Section 35G. The appellant had already paid a significant portion of the demand, leading to a dispute over the fairness of the additional pre-deposit. The Tribunal's decision to demand the entire amount was challenged, with the appellant arguing it was excessive. The High Court, after considering the facts and circumstances, found the appellant had met the 50% threshold and directed the Tribunal to proceed with the appeal without insisting on further deposit.

In conclusion, the High Court disposed of the appeal by making the interim order absolute, directing the Tribunal to hear the appeal on merits without requiring any additional deposit. The decision emphasized the importance of considering the total amount already deposited by the appellant in determining the quantum of pre-deposit required for appeal hearings under Section 35G.