2015 (9) TMI 936 - HC - Service Tax

Waiver of pre deposit - Held that - no material has been produced about the financial crunch or undue hardship, but considering the fact, that the appellant is a Government Company, we direct the appellant to deposit 50% of the service tax amount in question along with proportionate interest within four weeks from today; failing which the appeal shall dismissed for failure of pre-deposit. If compliance of the order passed by this Court is made, the recovery of the penalty is stayed Partial stay granted.

Summary

Issues:
1. Appeal for setting aside the order of the Customs Excise & Service Tax Appellate Tribunal rejecting waiver of pre-deposit.
2. Argument regarding payment of service tax by the appellant.
3. Financial crunch as a reason for inability to deposit the service tax amount.
4. Obligatory deposit before appeal hearing.
5. Discretion of the Appellant Authority to grant waiver of pre-deposit.
6. Consideration of financial crunch and undue hardship.
7. Direction to deposit 50% of the service tax amount within four weeks.
8. Stay of penalty recovery upon compliance with the court's order.

Analysis:
The appellant filed an appeal seeking to set aside the order of the Customs Excise & Service Tax Appellate Tribunal, which directed the deposit of a service tax amount along with interest. The appellant, a Government-owned company, argued that they had already paid the disputed amount based on their records but were unable to deposit the sum due to financial constraints. The respondent opposed the waiver, emphasizing the obligation to deposit before the appeal hearing and the discretion of the Appellant Authority to grant such waivers. The court noted the lack of evidence regarding financial hardship but acknowledged the appellant's status as a Government Company. Consequently, the court directed the appellant to deposit 50% of the service tax amount within four weeks to avoid dismissal of the appeal for non-compliance. The court also stayed the penalty recovery upon compliance with the deposit order. The appeal was partially allowed without costs.