2019 (7) TMI 334 - AT - Service Tax

Maintainability of appeal - Non-compliance with the pre-deposit - Section 35 F of the Central Excise Act, 1944 - Section 129E of the Customs Act, 1962- HELD THAT - Perusal of Section 35 F of the Central Excise Act, 1944 or Section 129E of the Customs Act, 1962 makes is abundantly clear that the 10% of the amount of demand confirmed as is mandatorily to be deposited by the appellant at the time of filing the Appeal before this Tribunal is a mandatory deposit in terms of Section 35F of the Central Excise Act. However, any payment made by the appellant during the course of the investigation has to be adjusted against the said percentage of mandatory deposit. Thus, 7.5% on the amount of duty confirmed was to be paid at the time of filing of the Appeal before the Commissioner(Appeals). The amount of duty confirmed in this case was ₹ 1,57,050/-. The amount already stands deposited, as discussed above is ₹ 37,860/- and 7.5% thereof will be ₹ 11,778.75. The amount admittedly already stands deposited is ₹ 37,860/-. The Commissioner (Appeals) has committed an error while dismissing the Appeal in limini to be barred by Section 35F - Appeal allowed by way of remand.

Summary

Issues:
Appeal dismissal due to non-payment of mandatory pre-deposit.

Analysis:
The appeal was filed against an order by the Commissioner(Appeals) which required a pre-deposit of 7.5% of the service tax amount involved. The appellant was accused of not discharging the liability for services related to transport of goods by road and renting of immovable property from 2012-13 to 2015-16. The appeal was dismissed due to non-payment of the mandatory pre-deposit.

The appellant argued that they had made two payments totaling &8377; 37,860 in lieu of the demand, which should be adjusted as part of the pre-deposit. They relied on a circular stating that payments made during investigation can be considered towards the pre-deposit requirement. The circular specified that 10% of the confirmed demand must be deposited at the time of filing an appeal before the Tribunal.

After reviewing the payments made by the appellant and the relevant circular, it was found that the amount deposited was sufficient to cover the 7.5% pre-deposit requirement. The demand confirmed was &8377; 1,57,050, and the amount already deposited was &8377; 37,860, meeting the required pre-deposit amount. Therefore, the Commissioner(Appeals) erred in dismissing the appeal on the grounds of non-payment of the pre-deposit.

The Tribunal set aside the order of the Commissioner(Appeals) and allowed the appeal by remanding the case for further adjudication on the merits of the Order-in-Original. The decision was pronounced on 04.07.2019.