2018 (5) TMI 211 - HC - Central Excise

Pre-deposit - the Tribunal granted stay on condition that the appellant deposits an additional amount of ₹ 1.60 crores - Held that - The appellant was asked to deposit an additional amount of ₹ 1.60 crores, only on account of factual finding that the petitioner has raised invoices and bills on the recipients of the service, for payment of the service tax also. The fact that the appellant was not able to recover money from the service recipients, cannot be a matter of concern for the Department. If the appellant had been successful in recovery of the money from the service recipients, the appellant would have been asked to pay the entire amount of ₹ 16.50 crores - appeal dismissed.

Summary

Issues:
1. Challenge to condition imposed by Customs, Excise & Service Tax Appellate Tribunal (CESTAT) for grant of stay.

Analysis:
The judgment pertains to a writ petition filed by the assessee challenging the condition imposed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) for the grant of stay. The appellant had been issued an Order-in-Original imposing a substantial liability of &8377; 16,51,26,861/- along with penalties. The appellant filed a statutory appeal before CESTAT and deposited &8377; 2.00 crores, exceeding the required 7.5% of the disputed liability. However, the Tribunal granted stay on the condition that the appellant deposits an additional amount of &8377; 1.60 crores, which the appellant contested. The court noted that such orders are discretionary, and interference is an exception rather than the norm. The Tribunal's decision was based on the factual finding that the appellant had invoiced and billed the service recipients for service tax, despite not being able to recover the money from them. The court emphasized that the Department's concern is not the appellant's inability to recover money but the liability imposed. Therefore, the court dismissed the appeal and granted time until 03-10-2017 for compliance with the order.

This judgment highlights the principles governing discretionary orders and the importance of factual findings in determining liabilities. The court emphasized that the appellant's actions in invoicing and billing the service recipients for service tax are relevant, irrespective of the actual recovery of funds. The decision underscores the significance of complying with statutory requirements and the consequences of failing to meet the conditions set by the Tribunal. The judgment serves as a reminder of the legal obligations and liabilities that entities must adhere to in matters concerning taxation and statutory appeals.