2015 (5) TMI 417 - HC - Service Tax

Waiver of pre-deposit - Tribunal in the case of appellant ordered to deposit entire amount of service tax with interest except penalty - appellant submitted that a coordinate bench (in which the Technical Member is common) in a similar case stay granted for entire demand - Held that - Appellant is not similarly placed as in the case of Prem Kumar Maini (2013 (12) TMI 1376 - CESTAT NEW DELHI). In the present case, the appellant is collecting the amount on the basis of an agreement, inter se, in lieu of the costs incurred in the construction of the bus terminus and is also levying charges on various accounts on the buses which are entering the said terminus. The amounts which are being collected are prima facie on the basis of a contractual obligation whereas in the case which is being relied upon, there is a difference and the stay was granted on the ground that it was a statutory fees which was being collected. It was, in such circumstances, the discretion has been exercised in favour of the appellant therein and merely because the words used are similar, namely, the Adda Fees , would not be a ground to grant the benefit of exemption from pre-deposit, as has been rightly argued by counsel for the Revenue. Appellant is not alleged to be suffering from any undue hardship, as such. The discretion which has, thus, been exercised by the Tribunal in directing only payment of service tax demand besides remittance of interest, cannot be said to be unjustified, in any manner and the interest of the Revenue has also been protected by directing the deposit of the taxable amount. The initial order was passed on 13.11.2013 and the modification/review could not have been, thus, prayed for, in the absence of any illegality or irregularity in the first order and merely that it came to the notice of the counsel that allegedly, in similar circumstances, the interim benefit had been granted to another party, would not itself be a ground for review, as such. - Decided against assessee.

Summary

Issues:
- Appeal under Section 35 G of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 challenging orders of the Tribunal regarding waiver of pre-deposit and stay of proceedings.
- Question of law regarding the correctness of dismissing the application for modification of the stay order.
- Interpretation of the nature of 'Adda Fees' collected by the appellant for infrastructure project and its liability for service tax.
- Review application filed by the appellant based on similar cases and the Tribunal's decisions in those cases.
- Discretion of the Tribunal in granting waiver of pre-deposit and stay based on the nature of fees collected by the appellant.

Analysis:
1. The appellant challenged the Tribunal's order regarding waiver of pre-deposit and stay of proceedings under Section 35 G of the Central Excise Act, 1944 and Section 83 of the Finance Act, 1994. The issue raised was whether the Tribunal was correct in dismissing the application for modification of the stay order dated 13.11.2013 and directing the appellant to make pre-deposit of the entire service tax amount. The Tribunal had initially granted waiver subject to depositing a specific amount, which the appellant sought to modify.

2. The appellant, registered under the Service Tax Department for commercial and industrial construction services, entered into an agreement to modernize a bus terminus and collect 'Bus Adda Fees' from bus operators. A show cause notice alleged violation of the Finance Act and Service Tax Rules, leading to the demand for service tax, interest, and penalties. The adjudicating authority confirmed the demand, which the Tribunal partially waived while directing the appellant to deposit the service tax amount.

3. The appellant filed a review application citing similar cases where full waiver was granted by the Tribunal. However, the Tribunal dismissed the application, emphasizing the distinction in the nature of fees collected by the appellant compared to the cases cited. The Tribunal highlighted that the fees collected were contractual in nature, not statutory, and therefore not eligible for full waiver.

4. The appellant argued that a Technical Member common to the cases had granted relief in similar circumstances, questioning the Tribunal's decision. The Revenue justified the Tribunal's order, emphasizing the absence of undue hardship to the appellant and the need to safeguard the Revenue's interest. The Court upheld the Tribunal's decision, noting the contractual nature of the fees collected by the appellant and the absence of grounds for interference.

5. The Court concluded that the Tribunal's exercise of discretion in directing payment of service tax demand and interest without full waiver was justified. The Court rejected the appellant's argument based on similar cases, emphasizing the distinction in the nature of fees collected. The Court dismissed the appeal, affirming the Tribunal's decision and upholding the interest of the Revenue in the matter.