2016 (3) TMI 352 - HC - Service Tax

Waiver of pre-deposit - whether the amount of ₹ 2,35,00,000/- as directed by the Tribunal was reasonable and justified - import of services towards handling the goods including inspection, sorting etc. - reverse charge - Held that - After hearing learned counsel for the parties and keeping in view the totality of the facts and circumstances of the case, a sum of ₹ 50 lacs shall be deposited by the appellant within a period of four weeks - It was pointed out that vide order dated 16.7.2015 passed by the Tribunal, the appeal was dismissed for non-compliance of stay order dated 12.5.2015 - Accordingly, the order dated 12.5.2015 is modified whereas the order 16.7.2015 passed by the Tribunal dismissing the appeal of the appellant for non-compliance of the pre-deposit order dated 12.5.2015 is set aside. On deposit of ₹ 50 lacs, the Tribunal shall proceed to adjudicate the appeal on merits expeditiously in accordance with law. - Decided in favor of assessee.

Summary

Issues involved:
1. Appeal under Section 35G of the Central Excise Act against orders by the Customs Excise and Service Tax Appellate Tribunal.
2. Dispute over the correctness of the order directing the appellant to deposit a specific amount along with interest.
3. Allegation of passing an ex parte order in contravention of legal provisions.
4. Disagreement on the calculation of tax liability.
5. Questioning the necessity of the deposit when the exercise is revenue neutral.

Analysis:
1. The appellant, engaged in manufacturing and exporting motor vehicle parts, entered agreements with foreign service providers for various services. Following an audit, a show cause notice was issued for non-payment of service tax. The Commissioner confirmed the demand, leading to an appeal before the Tribunal. The Tribunal directed the appellant to deposit a substantial amount for the appeal's hearing.

2. The appellant contended that the deposit requirement was unfair and excessive, while the revenue argued it was reasonable. The primary issue was the quantum of pre-deposit necessary for the appeal's hearing. The High Court, after considering arguments, ordered the appellant to deposit a reduced amount within a specified timeframe, ensuring justice.

3. The Tribunal's order dismissing the appeal for non-compliance with the deposit directive was modified by the High Court. The Court set aside the dismissal order and instructed the Tribunal to proceed with the appeal's adjudication upon the appellant's compliance with the revised deposit amount. The appeal was disposed of accordingly.