2019 (11) TMI 1482 - SC - Service Tax

Maintainability of appeal - non-compliance with the pre-deposit - condonation of delay of 812 days in filing appeal - period 1 April, 2007 and 31 March, 2008 - HELD THAT - The facts, as they emerged before the Court, indicate that the appeal filed by the assessee has been dismissed only on the ground of delay and failure of pre-deposit. The entire amount of tax, penalty and interest has been recovered. The submission of the assessee is that though it had preferred an appeal against the order dated 28 November, 2013, on the application for waiver of pre-deposit passed by the Commissioner (Appeals), the appeal was dismissed on merits on 23 December, 2013. The assessee submits that he was under the bona fide belief that the appeal filed against the order on the stay petition would be listed and, hence, there was a delay in filing the appeal before the CESTAT against the order dated 23 December, 2013. Since the entire amount by way of tax, penalty and interest has been recovered, the interests of justice would warrant that an opportunity be granted to the assessee to contest the appeal on merits - Appeal restored.

Summary

Issues:
1. Dismissal of appeal for non-deposit of pre-deposit amount.
2. Dismissal of appeal by CESTAT due to delay.
3. Dispute regarding service tax liability on "appearance money."
4. Appeal process before various authorities.
5. Recovery of entire amount due by way of service tax, penalty, and interest.
6. Filing of appeal by the assessee and doubts raised by the Revenue.
7. Granting opportunity to the assessee to contest the appeal on merits.
8. Setting aside the High Court's judgment and restoring the appeal for disposal on merits with a condition of paying costs.

Analysis:
1. The appeal in question was dismissed initially by the Commissioner (Appeals) due to the non-deposit of a pre-deposit amount of ?16.50 lakhs. Subsequently, the appeal was dismissed by CESTAT due to a delay of 812 days. The High Court declined interference in the matter based on the circumstances presented.

2. The dispute revolves around the service tax liability on an amount of ?1.50 crores received by the appellant as "appearance money" during the period of April 2007 to March 2008. The appellant claimed this income as a gift earned towards the inauguration of certain shops, arguing it was not subject to service tax.

3. The appeal process involved multiple stages, starting with a notice issued by the Commissioner of Customs, Central Excise, and Service Tax, demanding service tax outstandings. The appellant's appeals before the Commissioner (Appeals) and CESTAT were met with dismissals, leading to further legal proceedings.

4. The Union of India confirmed the recovery of the entire amount due by way of service tax, penalty, and interest during the pendency of the proceedings. The recovery process involved notices to bankers and the remittance of the outstanding amounts.

5. There were discrepancies regarding the filing of an appeal by the appellant against the order dated 28 November 2013. The Revenue doubted the filing, while the appellant claimed to have filed an appeal, supported by proof of filing. The court decided to grant an opportunity for the assessee to contest the appeal on merits.

6. In the final judgment, the Supreme Court set aside the High Court's order and restored the appeal for disposal on merits. The appellant was directed to pay costs amounting to ?50,000 to the respondent as a condition for the appeal's hearing, with a deadline of three weeks for the payment. Failure to comply would result in the dismissal of the appeal.