2018 (7) TMI 1134 - HC - Service Tax

Pre-deposit of of 10% of Interest - Held that - The record would disclose that at the stage of show-cause notice the principal liability was discharged, since the concerned agency i.e. Indraprastha Gas Limited paid the amount to the petitioner - the Court is of the opinion that the impugned order s direction should be modified. Accordingly, upon the petitioner depositing 7.5% of the amount claimed as demand towards interest liability as confirmed by the Commissioner (Appeals) within 4 weeks from today, the CESTAT shall proceed to hear the appeal on merits - petition allowed in part.

Summary

Issues: Challenge to CESTAT's direction for pre-deposit of interest amount; Modification of CESTAT's order; Compliance with pre-deposit requirement for appeal hearing.

In the present case, the petitioner challenged the direction of the CESTAT which mandated a pre-deposit of 10% of the interest amount due, exceeding ?14 lakhs, despite the discharge of the principal liability at the show-cause notice stage by the concerned agency. After hearing both parties, the Court opined that the impugned order's direction needed modification. The Court directed the petitioner to deposit 7.5% of the amount claimed as demand towards interest liability within 4 weeks. Upon this deposit, the CESTAT was instructed to proceed with hearing the appeal on its merits. The previous order of the CESTAT dismissing the appeal for non-compliance with the pre-deposit requirement was set aside. The CESTAT was further instructed to ensure the pre-deposit amount was made before proceeding with the appeal hearing. All rights and contentions of the parties were preserved, and the petition was partly allowed in the stated terms.