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TMI Blog2011 (1) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. Shri T. Rajendra Prasad, for the Respondent. [Judgment per : V.V.S. Rao, J.]. - This appeal is filed by the Revenue under Section 35G of the Central Excise Act, 1944 against the stay order dated 14-6-2010 of the Customs, Excise Service Tax Appellate Tribunal (CESTAT) [2010 (20) S.T.R. 521 (Tri.-Bang.)] whereby and whereunder the respondent s application for waiver of pre-deposit, under Section 35F of the Central Excise Act, was allowed and recovery of service tax was stayed. 2. The brief facts, relevant for this case are, as follows. The respondent runs various coaching centres in Andhra Pradesh and other States in India. Coaching is imparted for various courses like Intermediate (10 + 2), Engineering And Medical Courses Entrance Test, and other admission tests. For the four years i.e., 2003-04 to 2006-07, the respondent allegedly charged monetary consideration from students to the tune of Rs. 823,20,45,019/-. The respondent s activity of commercial training or coaching service attracts levy of service tax under Sections 65(26) and (27) read with sub-section (105)(zzc) of the Finance Act, 1994. After coming into force of the amendment to Section 65(105) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax is barred by limitation. This weighed with the learned CESTAT which passed the order impeached in this appeal. 5. After receiving the notice, ordered by this Court on 24-11-2010, the respondent appeared through Counsel, and filed counter affidavit. Inter alia, the respondent opposed the appeal raising the following contentions. As the matter is pending before the CESTAT the appeal is not maintainable; as the respondent society is a non-profit coaching centre, using its surplus only for educational activities, it is not liable to pay service tax; as the respondent is registered under Section 12A of the Income Tax Act, 1961 as a charitable trust, it cannot be treated as a commercial training or coaching centre; and, as levy of service tax was beyond the period of one year, it is barred by Section 73 of the Finance Act. 6. The Senior Standing Counsel for Revenue submits that, the learned CESTAT was in error in passing the impugned order in a routine manner ignoring Section 35F of the Central Excise Act. He also points out that, in the other appeal filed by the respondent against levy of service tax, the CESTAT had directed deposit of 100% of the tax demanded, whereas in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue. (Proviso (2) and Exception are omitted as not relevant). (emphasis supplied) 8. The main section makes pre-deposit mandatory in order to avail the remedy of appeal before the CESTAT. The first proviso is an exception to the general rule. It confers power on the Commissioner (Appeals), or the CESTAT, to dispense with such deposit subject to such conditions as may be imposed so as to safeguard the interests of revenue if the demand would cause undue hardship . The question of dispensing with pre-deposit would arise only when the duty demanded, or the penalty levied, would cause undue hardship to the assessee and not otherwise. Any order to dispense with pre-deposit has necessarily to be subject to certain conditions which are to be imposed to safeguard the interests of revenue. This provision and other similar provisions in fiscal laws have been considered in a number of cases. The Apex Court ruled that the power to dispense with the condition of pre-deposit for entertaining an appeal cannot be exercised in a routine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest. We are very sorry to remark that these considerations have not been borne in mind by the High Court and interim order of this magnitude had been granted for the mere asking. (emphasis supplied) 10. Benara Valves Ltd. v. CCE, 2006 (204) E.L.T. 513 (S.C.) = (2006) 13 SCC 347 = 2008 (12) S.T.R. 104 (S.C.) is a case directly involving the construction of Section 35F of the Central Excise Act. While observing that, it has become an unfortunate trend to casually dispose of stay applications ... it was held therein as follows. Two significant expressions used in the provisions are undue hardship to such person and safeguard the interests of the Revenue . Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interests of the Revenue have to be kept in view. As noted above there are two important expressions in Section 35F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration, interim relief can be given. 11. In Bhavya Apparels (P) Ltd. v. Union of India, 2007 (216) E.L.T. 347 (S.C.) = (2007) 10 SCC 129 the Supreme Court interpreted Section 129E of the Customs Act, 1962, which is in pari materia with Section 35F of the Central Excise Act, as requiring the Tribunal to consider the question whether or not a direction to deposit the amount would cause undue hardship and held that, without considering the said question, it cannot go into the merits of the appeal itself. In Union of India v. Adani Exports Ltd., 2007 (218) E.L.T. 164 (S.C.) = (2007) 13 SCC 207 = 2009 (13) S.T.R. 81 (S.C.) the Supreme Court laid down that, besides focusing on prima facie case, balance of convenience and irreparable loss, the Tribunal must necessarily impose conditions as may be necessary to safeguard the interests of revenue, while granting an order to dispense with pre-deposit for filing an appeal. 12. Indu Nissan Oxo Chemicals Industries Ltd. v. Union of India, (2008) 221 E.L.T. 7 (S.C.) = (2007) 13 SCC 487 is a case under Section 129E of the Customs Act. Following Dunlop India Ltd., the Supreme Court reiterated that, petitions for stay should not be dispose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or thrice to submit their explanation/objections. They did not do so. Of course they sought for personal hearing. After hearing the respondent personally, the Commissioner passed an elaborate order. When an application for stay and waiver of pre-deposit was made by the respondent, the CESTAT passed the following order granting relief. On perusal of the records and considering the submissions made by both sides, we find that the show cause notice in this case has been issued on 8-9-2008 demanding service tax for the period 2003-2007. We find that the activity of the appellant, i.e., training or coaching and collecting consideration was in dispute from the date when the definition of Commercial Training and Coaching Centre was introduced. We find that the decisions cited by the learned counsel are in favour of the assessee. It is also fact that the Govt. of India has brought in retrospective amendment to the definition of Commercial Coaching and Training Centre which could include the activity of the appellant and liability to service tax arises. Retrospective amendment made by the Act is silent on the question of limitation. We are in agreement with the learned counsel that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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