2019 (5) TMI 760 - HC - Service Tax

Maintainability of appeal - Section 35G of the Central Excise Act, 1955 - non-compliance with the stay order - dismissal of COD application - HELD THAT - An appeal under Section 35G, can only be on a substantial question of law. The order under appeal, is one refusing to condone the delay in filing the appeal. The delay was of the magnitude of 812 days. The Tribunal was not satisfied with the sufficient cause shown by the appellant in his application for condonation of delay. The only reason stated by the appellant in his application for condonation of delay was that he was advised that another appeal filed by him as against the conditional order passed on 28.11.2013 would also be taken up together with this appeal. The Tribunal was not satisfied with this reasoning. If the Tribunal is not satisfied with the reasoning stated by the appellant, we do not think that any substantial question of law would arise out of such an Order of the Tribunal. Even if we allow the appeal by taking a lenient view about the reasons for the delay and the hardship caused to the appellant, we do not think that the same would take the appellant anywhere. The reason is that so long as the conditional order on the application for waiver of pre-deposit, passed on 28.11.2013, is not set aside, the consequential order of the Commissioner dismissing the appeal on 20.12.2013, cannot be interfered with by CESTAT. It is well settled that an appeal without complying with the pre-deposit condition, is no appeal in the eye of law. Appeal dismissed.

Summary

Issues:
1. Whether the Commissioner (Appeals) correctly decided the appeal while another appeal against the Stay order was pending before the Tribunal?
2. Whether the Commissioner (Appeals) correctly dismissed the appeal solely for non-compliance with the stay order without assessing the case's merits?
3. Whether the Tribunal in Hyderabad was right in rejecting the condonation of delay application without verifying the status of the appeal against the stay order before the Tribunal in Bangalore?
4. Whether the Tribunal's decision to dismiss the condonation of delay application without contesting the fact that the appeal was filed against a stay application was appropriate?

Analysis:
1. The appellant, under Section 35G of the Central Excise Act, challenged the Commissioner (Appeals)'s decision while a separate appeal against the Stay order was pending before the Tribunal. The Tribunal dismissed the condonation of delay application without confirming the status of the appeal against the stay order. The Tribunal's decision was based on the appellant's failure to comply with the pre-deposit condition imposed earlier.

2. The case stemmed from a service tax demand on the petitioner for a specific period. Despite filing appeals and applications for waiver of pre-deposit, the appellant failed to comply with the pre-deposit condition set by the Commissioner, leading to the dismissal of the appeal. Subsequent appeals and orders further complicated the matter, ultimately resulting in the dismissal of the appeal due to non-compliance with the conditional order.

3. The appellant argued that retrospective application of a service tax amendment caused injustice, emphasizing the authorities' failure to consider this aspect. The Senior Counsel contended that the Tribunal should have considered the merits of the case rather than focusing solely on the delay issue. The appellant had paid the demanded amount in full, urging the court to allow the appeal and remit the matter for a merit-based consideration without prejudicing the Department.

4. The High Court, after considering the submissions, highlighted that an appeal under Section 35G must involve a substantial question of law. The Tribunal's decision to reject the condonation of delay was based on insufficient reasoning provided by the appellant. The Court emphasized that unless the conditional order on the waiver of pre-deposit was set aside, the appeal's dismissal could not be overturned. As the appeal did not comply with the pre-deposit condition, it was not legally valid, leading to its dismissal. Therefore, the Court dismissed the appeal, stating that no substantial questions of law arose in the case.