2014 (5) TMI 178 - HC - Service Tax

Waiver of pre deposit - Whether the order passed by the Customs, Excise and Service Tax Appellate Tribunal dismissing the appeal presented by the appellant is legal and proper and whether there is prima facie case, balance of convenience in favour of the appellant and whether irreparable loss would cause to the appellant if the order dismissing the appeal on account of failure to make pre-deposit is not set aside - Held that - directions of the appellate Tribunal in respect of the pre-deposit of the amount need not be interfered with. The counsel appearing for the appellant, on instructions, states that the appellant would deposit the amount as directed by the Appellate Tribunal within a specified period and the Tribunal be directed to decide the appeal on its own merits. - Time to make pre deposit is extended - Decided partly in favour of assesee.

Summary

Issues:
1. Whether the order passed by the Customs, Excise and Service Tax Appellate Tribunal dismissing the appeal is legal and proper?
2. Whether there is a prima facie case, balance of convenience, and potential irreparable loss to the appellant if the order dismissing the appeal due to failure to make a pre-deposit is not set aside?

Analysis:
1. The appellant appealed to the CESTAT against the order of the Commissioner (Appeals) which upheld the Assessing Officer's decision. The CESTAT directed the appellant to pre-deposit Rs. 50 lakhs within six weeks to consider the stay application for recovery of Service Tax. As the appellant failed to comply, the appeal was dismissed for non-compliance with the relevant provisions.

2. The appellant argued that out of Rs. 2.04 crores, Rs. 1.36 crores had already been paid, with a balance of around Rs. 67 lakhs. The appellant contended that the Tribunal should have waived the pre-deposit condition due to the harshness of the order.

3. The High Court, after hearing both parties, upheld the Tribunal's direction regarding the pre-deposit. The appellant agreed to deposit the required amount within a specified period. The Court granted three months for the deposit and set aside the Tribunal's previous order, allowing the appeal to be reconsidered on its merits.

4. The Court found that justice would be served by granting the appellant time to comply with the Tribunal's directions. Upon depositing Rs. 50 lakhs within three months, the previous order was quashed, and the Tribunal was instructed to decide the appeal promptly and in accordance with the law. The appeal was allowed with no costs incurred.