2024 (8) TMI 612 - HC - Service Tax

Requirement to deposit 7.5% of the duty amount as a pre-condition for preferring the appeal - primary reason for entertaining this Petition is on account of the lack of opportunity of hearing to the Petitioner in the case for determination of value of services and the service tax liability - HELD THAT - The department delivered an order on 28.03.2024, which is assailed by the Petitioner. The total service tax including cess liability for the period October 2015 to March 2016 and for the financial year 2016 to 2017, was an amount of Rs.3,29,60,809/-. This Petition has been filed on 02.07.2024, which is after three months and one week. It is an admitted position that an appeal has to be filed before the CESTAT within 90 days from the date of the communication of the order. The parties concede that the Tribunal has the power to condone the delay beyond 90 days. The ends of justice would be met by granting the Petitioner an opportunity to appear before the Principal Commissioner, Central GST and Central Excise, Nagpur-I, Commissionerate, for a re-hearing in the matter with relation to the show cause notice dated 21.04.2021. To balance the equities, it is deemed appropriate to direct the Petitioner to deposit 5% of the amount which is assessed towards service tax by the impugned order dated 28.03.2024. Appeal allowed in part.

Summary

Issues involved:
1. Entitlement to file appeal directly to the High Court under Section 86 of the Finance Act, 1994 without depositing the required amount.
2. Lack of opportunity for hearing to the Petitioner in the case for determination of value of services and service tax liability.
3. Delay in passing the final order by the department within the statutory period of one year.
4. Failure to provide a link for virtual hearing to the Petitioner.
5. Assailing the order dated 28.03.2024 regarding service tax liability.
6. Time limit for filing an appeal before the CESTAT.
7. Granting the Petitioner an opportunity for re-hearing before the Principal Commissioner, Central GST and Central Excise, Nagpur-I, Commissionerate.

Detailed Analysis:

1. The judgment addresses the issue of the Petitioner's entitlement to file an appeal directly to the High Court without depositing the required amount under Section 86 of the Finance Act, 1994. The Court considered the law laid down by the Hon'ble Supreme Court and entertained the Petition due to the lack of opportunity for a hearing in the determination of service value and tax liability.

2. The Court noted that the Petitioner did not seek an opportunity for a physical or virtual hearing despite tendering a reply to the show cause notice. The department failed to pass a final order within the statutory period, leading to the need for further hearings, highlighting the casualness in the Petitioner's response and the subsequent actions taken by the department.

3. The delay in passing the final order by the department within the prescribed period was acknowledged, necessitating additional hearings. The Court considered the circumstances and directed a re-hearing before the Principal Commissioner, Central GST and Central Excise, Nagpur-I, Commissionerate, with the Petitioner required to deposit 5% of the assessed tax amount.

4. The Petitioner's grievance regarding the failure to provide a link for virtual hearings was addressed, and the Court directed a physical hearing with the Petitioner's participation alongside legal assistance. The judgment outlined specific conditions for the re-hearing, including the deposit requirement, hearing arrangements, consequences of absence, and the due procedure to be followed by the concerned authority.

5. The judgment partially allowed the Writ Petition, setting aside the impugned order dated 28.03.2024, and providing detailed conditions for the re-hearing process to ensure justice and procedural fairness. The Court emphasized the importance of balancing equities and maintaining the integrity of the legal process in addressing the Petitioner's grievances.