2008 (4) TMI 51 - AT - Service Tax

Additional Commissioner confirmed demand, interest & penalty - Commissioner (Appeals) by the OIA set aside the demand, when pre-deposit was paid further appellant managed to get refund of the amount it had pre-deposited pursuant to the interim order of the Commissioner (Appeals) - undisputedly, even as per the order-in-appeal the appellant remains liable to pay service tax commissioner is not justified to allow refund without ensuring that tax liability has be discharged

Summary

Issues:
1. Confirmation of demand of service tax with penalties
2. Appeal before Commissioner (Appeals) and pre-deposit
3. Refund of pre-deposited amount
4. Non-cooperation in quantifying outstanding demand
5. Conduct of the appellant
6. Adjournment and listing of appeal
7. Inquiry into refund by CBEC

Analysis:
1. The Additional Commissioner confirmed the demand of service tax, penalties, and interest under various sections of the Finance Act, 1994. However, the Commissioner (Appeals) set aside the demand of service tax on specific charges and penalties, leading to appeals by both the assessee/appellant and the Department before the Tribunal. The Department's appeals were not listed during the hearing.

2. During the hearing, it was revealed that the appellant had pre-deposited a sum but managed to get a refund of that amount despite remaining liable to pay service tax. The Tribunal expressed confusion over allowing the refund without ensuring the discharge of the tax liability as per the order-in-appeal.

3. The Tribunal deferred the hearing to quantify the outstanding demand and consider the pre-deposit/stay under Section 35F of the Central Excise Act. However, the appellant's non-cooperation hindered the Department from determining the exact outstanding demand as per the order-in-appeal.

4. The conduct of the appellant was criticized by the Tribunal in light of the circumstances. Despite being inclined to pass a positive order regarding pre-deposit, the Tribunal decided to give another chance for the necessary actions to be taken, delaying any order until the next hearing scheduled for May 12, 2008.

5. The appeal was adjourned to be listed alongside the Department's appeals before the Bench presided over by the President. Meanwhile, the Tribunal directed the Central Board of Excise & Customs (CBEC) to investigate the circumstances surrounding the refund granted to the appellant and take appropriate disciplinary action against any officials found at fault, in accordance with the law.