2021 (7) TMI 629 - AT - Service Tax

Maintainability of appeal - non-compliance of pre-deposit under Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 - It is argued by the Ld. Consultant that amount deposited by the appellant towards the service tax should be considered as payment towards mandatory predeposit and the appeal ought to have been considered on merits - HELD THAT - The appellant has not been given the benefit of Sabka Vishwas Scheme as there was delay in payment of the service tax under the said scheme. Since the amount paid by the appellant is towards the service tax confirmed under the Order-in-Original dt. 24.06.2019, the said payment ought to have been considered towards compliance of pre-deposit having been made before the appeal is taken up for hearing. The Commissioner (Appeals) has issued reminders to the appellant to make pre-deposit by online on several dates even though they have made deposit of more than ₹ 5 lakhs which would suffice 7.5% of total tax demand as required under Section 35F of the Central Excise Act ibid. Needless to say that even if debit is made in Cenvat account, the same can be considered as sufficient compliance of pre-deposit. This being so, the Commissioner (Appeals) should not have insisted on making further pre-deposit over and above ₹ 5,74,103/- already paid by the appellant. The view taken by the Commissioner (Appeals) that the appellant has not complied with mandatory pre-deposit cannot sustain - matter is remanded to Commissioner (Appeals) with a direction to decide the case on merits without insisting on any further pre-deposit - Appeal allowed by way of remand.

Summary

Issues:
Appeal against dismissal for non-compliance of pre-deposit under Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994.

Analysis:
The appellant challenged the order of the Commissioner (Appeals) dismissing the appeal due to non-compliance with the mandatory pre-deposit requirement. The appellant had opted for the Sabka Vishwas Scheme, 2019, and paid an amount of ?5,74,103 towards settlement under the scheme. However, the payment was made after the scheme's deadline, leading to the rejection of the appeal by the Commissioner (Appeals). The appellant argued that the amount paid should be considered as part of the mandatory pre-deposit, allowing the appeal to be considered on merits. The Commissioner (Appeals) noted the payment but held that it did not fulfill the pre-deposit requirement. The Tribunal disagreed, stating that the payment made by the appellant should be considered as compliance with the pre-deposit, especially since it exceeded 7.5% of the total tax demand as required under Section 35F of the Central Excise Act. The Tribunal held that the Commissioner (Appeals) erred in not considering the payment towards the pre-deposit and remanded the matter to decide the case on merits without insisting on any further pre-deposit.

Conclusion:
The Tribunal set aside the Commissioner (Appeals) order and remanded the matter for a decision on merits without requiring additional pre-deposit. The Tribunal held that the appellant's payment towards the tax demand should have been considered as fulfilling the mandatory pre-deposit requirement, allowing the appeal to proceed for consideration on its merits.