2020 (3) TMI 314 - AT - Service Tax

Maintainability of appeal - compliance with the pre-deposit or not - appeal was rejected for the reason that the appellant did not deposit 7.5% of the service tax involved as was required under Section 35F of the Central Excise Act, 1944 - HELD THAT - It was imperative for the appellant to have deposited 7.5% for the service tax involved. This was not done. On the other hand, an application for waiver of pre-deposit was moved. The deposit of this statutory amount could not have been waived in view of the statutory provision. However one opportunity was required to be given to the appellant to make the deposit. In the interest of justice, it is considered appropriate that the matter be remanded to the Commissioner (Appeals) to hear the appeal filed by the appellant on merits by treating the amount of 10% deposited by the appellant before the Tribunal at the time of filing of the appeal towards the pre-deposit - appeal allowed by way of remand.

Summary

Issues: Appeal against rejection of appeal by Commissioner (Appeals) for non-deposit of statutory amount under Section 35F of Central Excise Act, 1944.

In this case, the appellant appealed against the rejection of their appeal by the Commissioner (Appeals) due to the non-deposit of 7.5% of the service tax involved, as required under Section 35F of the Central Excise Act, 1944. The appellant argued that the defect of non-deposit was not pointed out, and they were not given an opportunity to rectify it before the appeal was rejected. The appellant contended that the 10% deposit made before the Tribunal should be considered as a pre-deposit before the Commissioner (Appeals). On the other hand, the Department's Authorized Representative supported the impugned order, stating that the appellant should have first pressed for a waiver application instead of arguing the appeal on merit. The Tribunal noted that the appellant failed to deposit the required amount but had moved an application for waiver, which could not be granted due to statutory provisions. The Tribunal held that the appellant should have been given an opportunity to make the deposit. Consequently, the Tribunal quashed the impugned order and remanded the matter to the Commissioner (Appeals) to hear the appeal on merits, considering the 10% deposit made by the appellant before the Tribunal as a pre-deposit.

This judgment highlights the importance of complying with statutory requirements regarding pre-deposit of amounts in tax matters. It emphasizes the need for procedural fairness and giving parties an opportunity to rectify defects before rejecting appeals. The decision underscores the principle of justice and provides a pathway for the appellant to have their appeal heard on merits by remanding the matter to the Commissioner (Appeals).