2017 (4) TMI 40 - HC - Service Tax

Default clause - maintainability of appeal - Whether the CESTST under its order dated 17.07.2015, is justified by dismissing the appeal in light of default clause under order dated 19.11.2014? - Held that - Though the appellant is under obligation to adhere with the condition precedent, but in the instant matter, it appears that there was some dispute with regard to inclusion of interest with the amount that was to be deposited, therefore, some delay occurred in the matter - matter to be reheard in the interest of justice - appeal allowed by way of remand.

Summary

Issues:
Adjudication of Service Tax Stay Petition, Dismissal of appeal by CESTAT, Justification of dismissal based on default clause under order dated 19.11.2014.

Adjudication of Service Tax Stay Petition:
The Custom, Excise and Service Tax Appellate Tribunal (CESTAT) passed an interim order on 19.11.2014, subject to pre-deposit, a statutory condition for appeal. A writ petition filed against this condition was dismissed by the High Court on 22.01.2015. A special leave petition challenging the order was also dismissed by the Supreme Court on 19.02.2015, granting six weeks to comply with the directions. The CESTAT dismissed the appeal on 17.07.2015 due to non-compliance with the pre-deposit condition, leading to the current appeal.

Dismissal of appeal by CESTAT:
The CESTAT dismissed the appeal on 17.07.2015 citing non-compliance with the pre-deposit condition set in the order dated 19.11.2014. The appellant had deposited the tax amount but not the interest, resulting in the dismissal. The court noted a dispute regarding the inclusion of interest, causing a delay in compliance. Despite the obligation to adhere to the condition precedent, the court decided to set aside the dismissal order and directed the Tribunal to provide another opportunity to the appellant to fulfill the requirements within a reasonable period.

Justification of dismissal based on default clause under order dated 19.11.2014:
The key issue raised was whether the CESTAT was justified in dismissing the appeal on 17.07.2015 due to non-compliance with the default clause under the order dated 19.11.2014. The court, after considering the circumstances, decided to dispose of the appeal by setting aside the dismissal order and granting the appellant another chance to fulfill the pre-deposit condition within a reasonable period to ensure justice is served.