2015 (8) TMI 502 - HC - Service Tax

Waiver of pre deposit - Mandatory pre deposit - whether the petitioner would have to deposit the amount of 7.5% of the tax confirmed against him, as a condition for pursuing the appellate remedy before the Tribunal - Held that - petitioner, in whose case also the lis commenced in 2013, would not be required to deposit the amount of 7.5%, as required pursuant to the 2014 amendment, and in that respect, he would have an efficacious alternate remedy before the Tribunal where he can file an appeal, together with an application for waiver of pre-deposit and stay of recovery of the amounts confirmed against him by Ext. P6 order. At the time of filing the appeal, he will not be required to make any payment as a pre-condition for the hearing of the waiver application by the Tribunal. - petitioner is relegated to the alternate remedy available under the Finance Act, 1994, as amended, of approaching the Appellate Tribunal by way of an appeal against the order - Decided against Assessee.

Summary

Issues:
Challenge against Ext. P6 order confirming Service Tax and penalty - Availability of effective alternative remedy through filing an appeal before the Customs, Excise and Service Tax Appellate Tribunal - Requirement of depositing 7.5% of tax amount confirmed as a pre-condition for maintaining appeal.

Analysis:

The writ petition challenged Ext. P6 order confirming a demand of Service Tax and penalty on the petitioner. The court acknowledged various contentions raised against Ext. P6 order but emphasized the availability of an effective alternative remedy through filing an appeal before the Customs, Excise and Service Tax Appellate Tribunal as per the provisions of the Finance Act, 1994. The petitioner contended that a recent amendment required depositing 7.5% of the tax amount confirmed as a pre-condition for maintaining the appeal, leading to the present writ petition seeking relief from this requirement.

The court considered the facts and submissions and noted that the petitioner had an effective alternate remedy of filing an appeal before the Tribunal. The crucial point was whether the petitioner needed to deposit 7.5% of the tax amount confirmed against him as a condition for pursuing the appellate remedy. Referring to a recent Division Bench view, the court held that the petitioner's right of appeal under the previous provisions of law would not be affected by the 2014 amendment, as the lis had commenced prior to its introduction. The court cited legal precedents to support this view, emphasizing that the right of appeal vested is governed by the law prevailing at the date of the suit institution. Consequently, the petitioner was not required to deposit the 7.5% amount and had an efficacious alternate remedy before the Tribunal to file an appeal along with an application for waiver of pre-deposit and stay of recovery.

The court directed the petitioner to pursue the alternate remedy available under the Finance Act, 1994, as amended, by approaching the Appellate Tribunal through an appeal against Ext. P6 order. The appeal would be governed by the statutory provisions existing before the 2014 amendment. The court clarified that the dismissal of the writ petition did not reflect on the merits of the case, and the petitioner could raise all contentions against Ext. P6 order during the appeal process. Additionally, if the petitioner filed an appeal before a specified date, the Tribunal would consider the waiver application and proceed with the appeal accordingly.

In conclusion, the court disposed of the writ petition, directing the petitioner to pursue the appeal process before the Appellate Tribunal under the relevant statutory provisions predating the 2014 amendment.