9911796707
TMI Blog2014 (5) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-ST dated 23.08.2007 as a taxable service. It is further alleged that in course of an inquiry, it was revealed that the service providers to M/s Durgapur Steel Plant are not paying the proper service tax for Town maintenance which includes the petitioner as well. From the scrutiny of the balance sheet submitted by the petitioner, it is detected that various sums received under the contract, which attracts service tax, have not been paid. It was further detected that the petitioner registered himself in the month of August 2007 under "Commercial or Industrial Construction Services" but neither paid the service tax prior thereto nor thereafter. In reply to the said show-cause notice, the petitioner took various pleas which was not accepted by the authority and eventually, the demand was confirmed by an order dated 24.08.2010. Admittedly the petitioner assailed the said order before the Custom Excise and Service Tax Appellate Tribunal (CESTAT) by filing a statutory appeal and also filed an application for stay of the impugned order and further prayed for waiver of the pre-condition of deposit of the service tax and penalty. The said application came to be disposed of by the CESTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and Sri Krishna -vs- Union of India reported in 1998 (104) ELT 325 (Delhi). It is further submitted that the circulars, which is oppressive in nature, should be applied prospectively whereas the beneficial circulars should be applied respectively by placing reliance upon a judgment of the Supreme Court in case of Suchitra Components Ltd. -vs- Commissioner of Central Excise, Guntur reported in 2007 (208) ELT 321 (SC). Lastly it is submitted that while considering an application for waiver of pre-deposit condition, when a good prima facie case is made out, it would be unjust and caused undue hardship if the assessee is directed to deposit the tax so assessed and, therefore, the order passed by the CESTAT is not sustainable. Per contra, the learned Advocate appearing for the respondents submits that the original order passed by the respondent no.1 is an appellable one and in fact, the petitioner has availed the said statutory right by filing an appeal before the CESTAT. The said order cannot be assailed in the writ petition when the said appeal is still pending. It is further submitted that the CESTAT, after considering the matter for the purpose of exercising the discretion, have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Tribunal to dispense with the requirement of pre-deposit in as much as the case of the appellant was fully covered by the decision of a Special Bench of the Tribunal and still to insist upon the deposit of duty demanded and penalty levied would indubitably cause undue hardship to the appellant. The power to dispense with such requirement is conferred on the Tribunal to be exercised precisely in cases like these and, if it is not exercised under such circumstances, this Court will require it to be so exercised." Subsequently, the single bench of this Court in case of Bongaigaon Refinery & Petrochem Ltd.(supra) while defining the expression undue hardship held: "31. As already seen the phrase "under hardship" would cover a case where the appellant has a strong prima facie case. The phrase also in my view covers a situation where there is an arguable case in the appeal. In the former case the Appellate Authority should dispense with the pre-deposit altogether on the basis of the authorities referred to earlier. In the later case the authority would have to safeguard the interest of the revenue. The Collector has not applied his mind to this aspect of the matter at all. He had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cie case, is asked to deposit the amount of assessment so made or penalty so levied, it would cause undue hardship to him, though there may be no financial restrain on the appellant running in a good financial condition. The arguments that appellant is in a position to deposit or if he succeeds in appeal, he will be entitled to get the refund, are not the considerations for deciding the application. The order of the Appellate Authority itself must show that it had applied its mind to the issue raised by the appellant and it has been considered in accordance with the law. The expression "undue hardship" has a wider connotation as it takes within its ambit the case where the assessee is asked to deposit the amount even if he is likely to exonerate from the total liability on disposal of his appeal. Dispensation of deposit should also be allowed where two views are possible. While considering the application for interim relief, the Court must examine all pros and cons involved in the case and further examine that in case recovery is not stayed, the right of appeal conferred by the legislature and refusal to exercise the discretionary power by the authority to stay/waive the pre-depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have not got themselves registered under the said category, it amounts to a suppression with an intention to evade service tax. The authorities further held the contract for supply of manpower attracts service tax under the category of "Manpower Recruitment and Supply Agency Services". Broadly on the above findings, the demand was confirmed by the authorities which is assailed before the tribunal. Though the order of the Commissioner is also challenged in this writ petition, even after, having challenged the same before the tribunal, this Court does not intend to interfere with such order by invoking the power of judicial review. The order of the Commissioner may assume importance for the purpose of arriving at a finding over the prima facie case and not beyond with. The clear exposition of the fact narrated in the show cause notice and the finding made by the Commissioner manifest that the Commissioner has found certain services attracting the service tax under a different category than the one indicated in the show-cause notice. There lies a distinction between prima facie case and arguable case. In former, any direction for deposit of the demand would make undue hardship o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittedly, in the instant case, no such objection was raised by the adjudicating authority in the show-cause notice dated 22-6-2001 relating to Assessment Years 1988-1989 to 2000-2001. However, in the show-cause notice dated 12-12-2000, the process of electrifying polish finds a brief mention. Therefore, in the light of the settled legal position, the plea of the learned Counsel for the Revenue in that behalf cannot be entertained as the Revenue cannot be allowed to raise a fresh plea, which has not been raised in the show-cause notice nor can it be allowed to take contradictory stands in relation to the same assessee." The principle behind the issuance of the show-cause notice is not only to make aware the person against whom the action is intended to be taken but it must contain the language in precision which on reading thereof, make the person understand, the case which he has to defend. The show-cause notice is the foundation of an action and, therefore, a plea, which is not taken, shall not be permitted, as the person did not have an opportunity to meet the same. In the instant case, the showcause notice was issued on the plea of non-deposit of the service tax for the services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the respondent that the impugned order passed by the tribunal is capable of being assailed before the Appellate Court. There is no absolute bar in entertaining the writ petition under Article 226 of the Constitution despite existence of an alternative efficacious remedy. This Court finds that there has been a manifest injustice apparent on the face of the record. This Court does not feel that the jurisdiction under Article 226 of the Constitution is completely ousted. Since a strong prima facie case is made out by the petitioner, the deposit of 25% of the demand would certainly cause an undue hardship. Simultaneously, this Court also finds that the petitioner have been found guilty of suppressing the facts and have not paid the service tax under the category in which the registration is obtained. The interest of the revenue would be safeguarded if the petitioner is directed to deposit 10% of the demand confirmed in the impugned order within eight weeks from the date of the order. Needless to mention that the observations and/or findings made in this order is prima facie and tentative one, the tribunal shall decide the appeal independently without being swayed by such observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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