2015 (1) TMI 39 - AT - Service Tax

Rejection of appeal by the commissioner (appeals) for non compliance of pre-deposit order - Penalty u/s 76, 77 & 78 - Held that - In the ad interim order the Commissioner (Appeals) had inter alia stated that in case of failure to pre-deposit the appeal shall be liable to be dismissed for non-compliance to the order . The Commissioner (Appeals) had not said that in case of failure to pre-deposit, the appeal shall stand dismissed. In the case of Prem Nath Monga Foods and Beverages Pvt. Ltd. Vs. Collector of Central Excise - 1 1992 (10) TMI 152 - CEGAT, NEW DELHI CESTAT remanded the matter as Show Cause Notice prior to dismissal of appeal for non-compliance of stay order was not issued - commissioner (Appeals) had not disposed of the application for modification in accordance with the principles of natural justice. Therefore we set aside the impugned order and remand the case to the Commissioner (Appeals) - Decided in favour of assessee.

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Dismissal of appeal for non-compliance with pre-deposit order.
3. Commissioner (Appeals) rejecting appeal without properly disposing of modification application.
4. Lack of opportunity for appellants to present their case.
5. Interpretation of pre-deposit order consequences.

Analysis:

1. Condonation of Delay: The appellants filed a COD application for condonation of delay in filing the appeal. The Tribunal, considering the reasonable cause for delay provided in the COD application, decided to condone the delay of 31 days.

2. Dismissal for Non-Compliance: The appellants filed a stay application along with the appeal against the Order-in-Appeal that dismissed their appeal for non-compliance with the pre-deposit order of the Commissioner (Appeals). The pre-deposit order required payment of 50% of the service tax demand within a specified time failing which the appeal would be liable to be dismissed.

3. Rejection of Appeal: The appellants contended that their appeal was rejected by the Commissioner (Appeals) without properly disposing of their modification application and without giving them an opportunity to present their case. Citing a precedent, they argued that the Commissioner (Appeals) had the power to recall the interim order and should have considered all pleas raised before passing any order.

4. Lack of Opportunity: The Tribunal noted that although a hearing was granted in response to the modification application, it was not conducted on the appointed date. The decision to reject the modification application was made without affording the appellants a personal hearing, which raised concerns regarding the principles of natural justice.

5. Interpretation of Pre-Deposit Order: The Tribunal analyzed the pre-deposit order's language, highlighting that failure to pre-deposit would make the appeal liable to be dismissed, not automatically dismissed. Citing a relevant case law, the Tribunal emphasized the need for the authority to issue a show cause notice before dismissing an appeal for non-compliance with a stay order, ensuring the principles of natural justice are upheld.

In conclusion, the Tribunal set aside the impugned order and remanded the case to the Commissioner (Appeals) with specific directions to dispose of the modification application after providing the appellants an opportunity to be heard and to deal with the appeal in accordance with the decision on the modification application.