2016 (4) TMI 292 - HC - Service Tax

Waiver of pre-deposit - Order passed without considering the contentions of the appellant - Requiring the appellant to deposit ₹ 1.8 crores as pre-deposit along with proportioned interest - Held that - in a similar appeal by a sister concern of the appellant, this Court noted a similar contention of the appellant and remanded the matter to the CESTAT for consideration of the appellant s application for waiver of the pre-deposit afresh in accordance with law. Hence, as the contentions of appellant have not been considered by the CESTAT when it passed the impugned order, the impugned orders dated 28th July 2015 and 9th February 2016 are set aside. - Appeal disposed of

Summary

Issues: Appeal against pre-deposit order by CESTAT, Non-consideration of jurisdictional issues by CESTAT, Remand by High Court for fresh decision

In the present case, the appeal was filed against an order by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) requiring the Appellant to deposit a specific amount as pre-deposit failing which the appeal would be dismissed. The Appellant contended that the demand under the head 'construction service' was in contravention of a circular issued by the Central Board of Excise and Customs, clarifying that the activity should be treated as a works contract. The Appellant also argued that a distinction had to be made between the value of goods supplied and the value of services rendered for the purposes of service tax, citing a judgment of the Supreme Court. The High Court noted that similar contentions raised by a sister concern of the Appellant were remanded for fresh consideration by the CESTAT. Consequently, the High Court set aside the impugned orders and revived the stay application for a fresh decision by the CESTAT, emphasizing the non-consideration of crucial jurisdictional issues by the CESTAT.

The High Court, after considering the arguments presented by the Appellant's counsel, found that the CESTAT had failed to address important jurisdictional issues raised by the Appellant regarding the classification of the service under 'construction service' and the distinction between goods supplied and services rendered for service tax purposes. The Court highlighted that the CESTAT did not take into account these significant contentions while passing the impugned orders. Additionally, the High Court referenced a previous case involving a sister concern of the Appellant where similar contentions led to a remand for fresh consideration by the CESTAT. Consequently, the High Court concluded that the non-consideration of these vital issues warranted setting aside the previous orders and directing a fresh decision in accordance with the law.

In light of the failure of the CESTAT to address the crucial jurisdictional issues raised by the Appellant, the High Court decided to set aside the orders dated July 28, 2015, and February 9, 2016. The Court further directed the revival of the stay application filed by the Appellant before the CESTAT for a fresh decision in adherence to legal principles. By doing so, the High Court ensured that the appeal and the pending application were disposed of in a manner that allowed for a comprehensive examination of the jurisdictional issues raised by the Appellant, emphasizing the importance of due consideration of all relevant aspects in tax matters.