2023 (5) TMI 301 - AT - Service Tax

Maintainability of appeal - non-payment of required pre-deposit amount in cash - imposition of Service tax on the basis of turnover shown in the Income tax returns of 2013-14 - rejection of Appellant s appeal filed before the Commissioner (Appeals) challenging such order - HELD THAT - The appeal should not be admitted for hearing by the Commissioner (Appeals) in the event of non-compliance of the provisions mentioned above but ones appeal is admitted for hearing Commissioner (Appeals) has to follow the dictates of law provided under Section 35A(iv) and dispose of the appeal stating the points for determination and the decision thereon with reasons for such decision and he should not have disposed of the appeal after hearing the appeal only for non-compliance of pre-deposit provisions in view of the wordings available in the text underlined above, namely shall not entertain any appeal and appeal filed by the Appellant is liable for rejection . To put it otherwise, there is a difference between dismissal of appeal and rejection of the same. Having regard to the fact that Appellant had removed the defects and paid the entire pre-deposit amount of 10% in cash through Challan for filing appeal before the CESTAT, as has been noted in order dated 28.02.2023 for admitting the appeal, it is considered proper to remind the appeal back to the Commissioner (Appeals) for determination of issues and his finding on the same as contemplated in Section 35A(iv). Appeal allowed by way of remand.

Summary

Issues Involved:
The legality of the adjudication order confirming the imposition of Service tax based on turnover shown in the Income tax returns of 2013-14 and the rejection of the appeal filed before the Commissioner (Appeals) due to non-payment of the required pre-deposit amount in cash is challenged in this appeal.

Summary:

Issue 1: Compliance with Pre-deposit Requirements

The Commissioner (Appeals) dismissed the appeal for non-compliance with Section 35F of the Central Excise Act 1944, which mandates a deposit before filing an appeal. The appellant had paid a portion of the disputed amount through ITC reversal in GSTR-3B, but the Commissioner held that the deposit should have been made under the erstwhile law. The Tribunal noted the provisions of Section 35F and a relevant Board Circular, emphasizing the need for a deposit before entertaining an appeal. While acknowledging the Commissioner's reasons, the Tribunal highlighted the distinction between dismissal and rejection of an appeal. The Tribunal found that the appeal should not have been dismissed solely for non-compliance with pre-deposit requirements, especially when the appellant rectified the issue by paying the full pre-deposit amount in cash for filing an appeal before the CESTAT.

Issue 2: Remand for Re-hearing on Merit

Considering that the appellant rectified the defects and paid the entire pre-deposit amount in cash for filing the appeal before the CESTAT, the Tribunal remanded the appeal back to the Commissioner (Appeals) for a re-hearing on merit. The order passed by the Commissioner of GST & Central Excise (Appeals) was set aside, allowing the appeal to proceed for re-evaluation on its merits.

The appeal is allowed by way of remand to the Commissioner (Appeals) for re-hearing on merit, and the previous order is set aside for further determination of issues as per Section 35A(iv) of the Central Excise Act 1944.