2008 (2) TMI 81 - AT - Service Tax

Appeal dismissed by comm.(A) for delay in compliance with direction of pre-deposit of duty & penalty in view of case of ONGC revenue contend that necessary clearance from the Committee on Disputes (COD) hasn t been obtained hence appeal is not maintainable held that as per the clarificatory orderfor above impugned ratio of ONGC is not applicable so COD clearance is not required delay is condonable so Comm(A) should have decided the appeal on merits appeal is allowed by way of remand

Summary

Issues:
1. Compliance with Section 35F of the Central Excise Act for pre-deposit of duty and penalty.
2. Maintainability of the appeal without clearance from the Committee on Disputes (COD).
3. Justification of the Commissioner (Appeals) in dismissing the appeal for non-compliance.
4. Consideration of merits of the case by the Tribunal.

Analysis:
1. The appeal was filed against the Commissioner (Appeals) order dismissing it due to non-compliance with Section 35F of the Central Excise Act, which mandates pre-deposit of duty and penalty. The appellant was directed to pre-deposit a specific amount by a certain date, which was not complied with within the stipulated time frame. The Commissioner (Appeals) held that the order had not been adhered to, leading to the dismissal of the appeal.

2. A preliminary objection was raised regarding the maintainability of the appeal without obtaining necessary clearance from the Committee on Disputes (COD) as per the Supreme Court decision in ONGC v. CCE. However, the Tribunal found that this decision did not apply in the present case, as the purpose of the decision was to minimize avoidable litigation without impeding statutory remedies available to the party.

3. The Tribunal observed that the Commissioner (Appeals) had dismissed the appeal solely on the grounds of non-compliance without delving into the merits of the case. As the merits were not considered, the Tribunal also refrained from analyzing them. It was concluded that if the Commissioner (Appeals) was unjustified in dismissing the appeal based on non-compliance, the matter should be remanded for a decision on merits. Therefore, the Tribunal set aside the impugned order.

4. Regarding the delay in compliance with the pre-deposit order, the Tribunal noted that there was only a seven-day delay and that the order had been substantially complied with. It was suggested that the Commissioner (Appeals) should have condoned the delay, extended the compliance period, and decided the appeal on its merits. Consequently, the Tribunal dispensed with the pre-deposit requirement, set aside the impugned order, and remanded the matter to the Commissioner (Appeals) for a decision on the merits, ultimately allowing the appeal.