2008 (7) TMI 56 - HC - Service Tax

Club - At the time of consideration of application for waiver of pre-deposit, the Tribunal is not required to embark upon a detailed inquiry to find out whether the applicant has a strong case or not - Once the Tribunal has passed the order by application of mind then such an order does not require any interference by this Court in exercise of the writ jurisdiction - Tribunal has rightly waived the pre-deposit of remaining amount of Service Tax and penalties

Summary

Issues:
1. Petition for quashing order of Customs, Excise and Service Tax Appellate Tribunal.
2. Application for waiver of pre-deposit of Service Tax and penalties.
3. Interpretation of proviso to section 35F of the Central Excise Act, 1944.

Analysis:
1. The petitioner sought to quash the order of the Customs, Excise and Service Tax Appellate Tribunal, which partially allowed the application for waiver of pre-deposit of Service Tax and penalties. The Tribunal directed the petitioner to deposit Rs. 15 lakhs within eight weeks to waive the remaining amount. The petitioner had already deposited a portion of the demanded sum. The Tribunal considered the operational date of the petitioner Club and deemed it liable to Service Tax from a specific date, leading to the partial waiver decision.

2. The High Court, after reviewing the impugned order, found no grounds to interfere with the Tribunal's decision. The Court emphasized that the Tribunal has the discretion under the proviso to section 35F of the Central Excise Act, 1944 to consider relevant facts while deciding on waiver applications. It was noted that the Tribunal is not obligated to conduct an extensive inquiry into the strength of the applicant's case but must assess if there is a prima facie case or if the balance of convenience favors the applicant. The Court upheld the Tribunal's decision to waive the pre-deposit amount, considering the total demand against the petitioner and the revenue's interest.

3. The judgment highlighted that once the Tribunal has made a decision after due consideration, there is no need for the Court to intervene through writ jurisdiction. The Court affirmed that the Tribunal's action in waiving the remaining Service Tax and penalties, subject to the initial deposit, was appropriate in safeguarding the revenue's interest. Consequently, the Court dismissed the petition, affirming the Tribunal's decision and emphasizing the importance of considering relevant factors in such cases.