Where Pre-deposit of principal demand of Service tax has been waived off, CESTAT cannot order of pre-deposit for consequential interest component as a condition precedent for hearing appeal

[Bimal jain]

Dear Professional Colleague,

“Where Pre-deposit of principal demand of Service tax has been waived off, CESTAT cannot order of pre-deposit for consequential interest component as a condition precedent for hearing appeal”

We are sharing with you an important judgment of Hon’ble High Court, Punjab and Haryana, in the case of Punjab Chemicals & Corp Protection Ltd. Vs. Commissioner of Central Excise, Chandigarh-II [2014 (5) TMI 985 - PUNJAB & HARYANA HIGH COURT] on the following issue:

Issue:

Whether the CESTAT order for pre-deposit of consequential interest component as a condition precedent for hearing appeal is justified when Pre-deposit of principal demand of Service Tax has been waived off?

Facts & background:

In the instant case, the Hon’ble CESTAT disposed off the Stay Application filed by Punjab Chemicals & Corp Protection Ltd. (“the Appellant”) and stayed the entire demand of Service tax amounting to ₹ 35,14,534/-. However, the Appellant was directed to pay interest component on the Service tax amount within four weeks failing which the appeal shall be rejected.

Held:

The Hon’ble High Court Punjab & Haryana held that once the realization of the principal liability was stayed and condition of pre-deposit was waived off, it would not be proper to direct that the entire interest component on the Service tax assessed be deposited as a condition precedent for hearing of the appeal. Hence, pre-deposit of interest was set aside.

Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us.

Thanks & Best Regards,

Bimal Jain

FCA, FCS, LLB, B.Com (Hons)

Delhi:

Flat No. 34B, Ground Floor, Pocket - 1,

Mayur Vihar, Phase - I,

Delhi – 110091, India

Desktel: +91-11-22757595/ 42427056

Mobile: +91 9810604563

Chandigarh:

H. No. 908, Sector 12-A,

Panchkula, Haryana – 134115

Kolkata:

Ist Floor, 10 R G Kar Road

Shyambazar, Kolkata – 700 004

Email: [email protected]

Web: www.a2ztaxcorp.com

Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon.

Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission.