2016 (7) TMI 130 - HC - Service Tax

Restoration of appeal - delayed pre-deposit of amount as directed by the tribunal - Validity of order refusing to restore the order which was dismissed for non-compliance of stay order and for want of prosecution - Held that - we answer the substantial question by holding that in peculiar facts and circumstances of the case we are of the considered view that the learned Tribunal was not right in dismissing the appeal for want of prosecution or non-compliance of the interim order for deposit of pre-deposit amount. - Appeal restored before the Tribunal.

Summary

Issues involved:
1. Dismissal of appeal for non-compliance with pre-deposit requirement under Section 35(c) of the Central Excise Act and rules of procedure.
2. Restoration of the appeal and the duty of the Appellate Tribunal to decide the appeal on merits.

Detailed Analysis:
1. The appellant-assessee filed an appeal challenging a show cause notice alleging liability to pay duty on services provided. The Commissioner (Appeals) rejected the appeal, leading to an appeal before the Customs, Excise & Service Tax Appellate Tribunal. The Tribunal ordered a pre-deposit of Rs. 5 lakhs, which the appellant failed to comply with, resulting in the dismissal of the appeal. Subsequent attempts for restoration were also dismissed for want of prosecution. The appellant argued that the appeal should have been decided on merits, citing relevant legal precedents emphasizing the duty of the Tribunal to hear appeals on their merits despite procedural lapses.

2. The appellant contended that despite the delay in depositing the pre-deposit amount, the appeal should have been restored and decided on merits. The appellant referred to legal judgments highlighting instances where appeals were restored and heard on merits even after belated compliance with pre-deposit requirements. The Revenue argued against restoration, citing the appellant's failure to comply within the stipulated time. The High Court noted that the Tribunal had not made efforts to decide the appeal on its merits as required by law, emphasizing the importance of hearing appeals on their legal issues rather than dismissing them on procedural grounds. The Court held that the appeal should have been decided on merits after the appellant deposited the pre-deposit amount, as it did not cause prejudice to either party.

In conclusion, the High Court allowed the appeal, quashed the orders dismissing the appeal for non-compliance, and directed the Appellate Tribunal to hear and decide the appeal on its merits in accordance with the law. The judgment emphasized the importance of ensuring that appeals are decided based on legal issues rather than procedural technicalities, especially when pre-deposit requirements are met.