2024 (2) TMI 908 - AT - Service Tax

Dismissal of appeal - failure to deposit the statutory pre-deposit amount contemplated under section 35F of the Central Excise Act, 1994 - HELD THAT - It transpires from the records that as the appellant had not made the statutory pre-deposit contemplated under section 35F of the Central Excise Act, the Commissioner (Appeals) dismissed the appeal. However, what needs to be noted is that the appellant had stated before the Commissioner (Appeals) that the main contractor i.e. M.P. Housing Board had deposited the required service tax amount and, therefore, the appellant, as a sub-contractor, would not be required to deposit service tax. There was some confusion at the relevant point of time in 2016 as there were contrary decisions of the Tribunal, and ultimately a Larger Bench of Tribunal in COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. 2019 (6) TMI 518 - CESTAT NEW DELHI-LB held that a sub-contractor would have to pay the service tax, even if the main contractor had paid the service tax. In such peculiar circumstances, when there was some confusion at the relevant point of time, we consider it appropriate to remand the matter to the Commissioner (Appeals) to hear the appeal on merits since the appeal was dismissed solely for the reason that the statutory requirement of pre-deposit had not been deposited. The appeal may be heard on merits as the appellant has deposited 10% of the duty confirmed while filing this appeal and so it would not be necessary for the appellant to deposit the statutory amount required to be deposited before the Commissioner (Appeals). The matter is remitted to the Commissioner (Appeals) to decide the appeal on merits. The appeal is allowed by way of remand.

Summary

Issues Involved: Appeal against dismissal for failure to deposit statutory pre-deposit amount under section 35F of the Central Excise Act, 1994.

Summary:
The appeal challenges the order of the Commissioner (Appeals) dismissing the appeal due to non-deposit of the statutory pre-deposit amount under section 35F of the Central Excise Act. The appellant claimed that the amount had been deposited by the Madhya Pradesh Housing Board, as they were a sub-contractor for work entrusted to the Board. The appellant believed that if the main contractor had deposited the amount, they would not be required to do so. The appellant had deposited 10% of the confirmed amount under section 35F at the time of filing the appeal. The department argued that there was no error in the Commissioner's order and the appeal should be dismissed.

The Tribunal noted the confusion regarding the requirement for the appellant to deposit the service tax amount, considering the conflicting decisions at the time. Ultimately, a Larger Bench held that a sub-contractor would still be liable to pay the service tax, even if the main contractor had paid it. In light of this confusion, the Tribunal remanded the matter to the Commissioner (Appeals) to hear the appeal on merits, as the appellant had already deposited 10% of the confirmed duty. The order of the Commissioner (Appeals) was set aside, and the appeal was allowed to proceed for a decision on merits.

In conclusion, the Tribunal remitted the matter to the Commissioner (Appeals) for a fresh decision on the appeal, considering the appellant's partial deposit and the confusion surrounding the requirement for the appellant to deposit the statutory pre-deposit amount.