2018 (12) TMI 1241 - HC - Central Excise

Restoration of appeal - praying for restoration of appeal was made with a delay of about 5 years - non compliance with the condition of pre-deposit - Held that - If the legal position wipes out substantial liability or entire liability, as, according to the appellant, construction of residential complex by a builder was subjected to service tax only from 01.7.2010, this vital point has to be considered by the Tribunal and if this plea is acceptable, it goes without saying that the appellant made out a strong prima facie case. Hence, we are constrained to interfere with the impugned order, however, subject to a condition. The appellant had already pre-deposited ₹ 7 lakhs. If the appellant complies with this condition within the time stipulated by us in this judgment, then the two miscellaneous applications shall stand automatically restored to the file of the Tribunal and the Tribunal shall take a fresh decision in both the applications and more particularly in the application for modification of the stay order - appeal allowed.

Summary

Issues:
1. Delay in restoration application filing and rejection by Tribunal
2. Dismissal of appeal for non-compliance of stay order
3. Consideration of modification application by Tribunal

Analysis:
1. The appellant filed appeals under Section 35G of the Central Excise Act, challenging final orders passed by the Tribunal. The first issue raised was regarding the delay in filing the restoration application. The appellant argued that the original order was served late, impacting the restoration timeline. The Tribunal rejected the restoration application without delving into the merits of the claim, questioning the delay. The second issue pertained to the dismissal of the appeal for non-compliance with the stay order. The appellant cited legal precedents and circulars to support their case, questioning the Tribunal's decision. The third issue involved the Tribunal's failure to address the modification application seeking a change in the stay order conditions based on legal interpretations and factual considerations.

2. The Tribunal's order dated 16.7.2018 was challenged by the appellant, who failed to comply with the pre-deposit condition leading to the dismissal of the appeal. The appellant sought restoration and modification of the stay order based on legal arguments and factual grounds. The Tribunal dismissed the restoration application without considering the modification plea, prompting the appellant to appeal to the High Court. The High Court noted the appellant's contentions regarding the liability under service tax laws and the impact of legal interpretations on the case.

3. The High Court, after hearing both parties, observed that the Tribunal failed to address the modification request adequately. The Court emphasized the importance of considering legal positions that could significantly affect the liability of the appellant. Noting the appellant's strong prima facie case, the Court set aside the Tribunal's order subject to a condition. The appellant was directed to deposit an additional sum within a specified period for the restoration of the applications. Failure to comply would result in the dismissal of the appeals. The Court's decision aimed to ensure a fair consideration of the appellant's arguments and legal positions by the Tribunal, emphasizing the need for a thorough review of the case based on the presented contentions and legal interpretations.