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TMI Blog2013 (12) TMI 1473X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to pre-deposit Rs. 30 lakhs. The appeal was, according to the petitioner, dismissed after service of the writ petition on the concerned respondents including the Commissioner (Appeals). 3. The petitioner claims to carry on business of providing services of liaisoning and monitoring of movement of coal to the plants of cement manufacturing companies. During the period from 10th September, 2004 to 15th June, 2005, M/s. Ambuja Cement Eastern Limited and some other cement companies appointed the petitioner as their "Coal Loading Supervisory Representative" to ensure proper loading of coal and to verify the quality and quantity of the coal so loaded. 4. As "Coal Loading Supervisory Representative", the petitioner was required to obtain consent of coal companies to load coal into wagons on behalf of its clients; obtain sanction from the office of the Executive Director, Rail Movement, for movement of coal to clients; to supervise the loading of wagons at the collieries having regard to the proper quality and quantity; send samples of coal to the laboratory of the clients for the purpose of analysis of coal and for complying with the formalities relating to payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that classification of the service rendered by the petitioner under the head 'Clearing and Forwarding Agent' was done erroneously and this was known to these authorities. 11. Section 65(105)(zzp) covering levy of Service Tax under the head 'Business Auxiliary Service' was introduced by an amendment with effect from 1st June, 2003. After the aforesaid amendment 'Business Auxiliary Service' was defined to mean, "any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) any incidental or auxiliary support service such as billing, collection or recovery of cheques, accounts and remittance, evaluation of prospective customer and public relation services, and includes services as a commission agent, but does not include any information technology service." 12. By a notification dated 20th June, 2003, levy of Service Tax on a 'commission agent', i.e. a person who causes sale or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services;" 15. After insertion of the definition of commission agent with effect from 16th June, 2005 the services rendered by the petitioner came within the ambit of services of commission agent. The petitioner, therefore, obtained Service Tax registration and started paying Service Tax. According to the petitioner the petitioner has duly being filing statutory returns to the Service Tax authorities in accordance with law. 16. In February, 2008, in course of audit of the business premises of the petitioner, certain audit queries were raised alleging that the petitioner had not paid Service Tax amounting to Rs. 48,47,784/- during the period September, 2004 to June 2005. 17. On 22nd September, 2009 a show cause cum-demand notice being C. No. V(15) 176/ST-Adjn/Addl. Comm/09/22901 was issued by the Additional Commissioner of Service Tax, Kolkata alleging inter alia that the petitioner had evaded Service Tax of Rs. 48,4 7,784/- under the head 'Business Auxiliary Service'. 18. Section 73(1) of the 1994 Act pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from 16th June, 2005 onwards. The same activity could not be taxed for a prior period under the head 'Business Auxiliary Service', and that too, by invoking the extended period of limitation. The petitioner also made an application under Section 35F of the Central Excise Act for waiver of pre-deposit. 22. By an order No. 17/ST/KOL/2012, dated 9th February, 2012 the Commissioner directed the petitioner to deposit Rs. 30 Lakhs as pre-deposit under Section 35F of the Central Excise Act read with Section 83 of the Finance Act, 1994, inter alia holding that the petitioner had not made out any prima facie case. The petitioner was directed to compliance report by 25th March, 2012. 23. Section 35F of the Central Excise Act provides as follows : "Section 35F. Deposit, pending appeal, of duty demanded or penalty levied. - Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Bongaigaon Refinery & Petrochem Ltd. (supra) were followed by this Bench in M/s. Tijiya Steel Pvt. Ltd. & Anr. v. Union of India & Ors. reported in (2007) 2 Cal LT 358 (HC). 28. In M/s. Tijiya Steel Pvt. Ltd. (supra) this Court has observed that in considering the question of waiver of pre-deposit, two factors are of paramount importance, the financial capacity of the appellant and the prima facie case. The financial capacity of the appellant has to be considered in all cases, irrespective of the prima facie merits of the case. Even where an appellant has the financial capacity to deposit the disputed tax and/or penalty, pre-deposit might have to be waived if the appellant makes out a prima facie case. 29. Where there is a very good prima facie case, pre-deposit would have to be waived altogether. Where the appellant has an arguable case, pre-deposit might be waived on such conditions as would protect the interest of Revenue. In fact, the Commissioner (Appeals), was conscious of his duty to consider the prima facie case and accordingly recorded a finding that the service rendered was covered under the definition of business auxiliary service. The Commissioner (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case warrant dispensation of pre-deposit, pre-deposit must be dispensed with. 34. In J.N. Chemical (Pvt.) Ltd. (supra) the Division Bench found that the appellant was covered by another decision of the Tribunal. The Division Bench, therefore, examined the findings with regard to prima facie case and observed that it was impossible for the Tribunal to arrive at the conclusion that it could not be said that the appellant had a good prima facie case. 35. In I.T.C. Ltd. v. Commissioner (Appeals), Customs & Central Excise, reported in 2005 (184) E.L.T. 347 (All.) a Division Bench of Allahabad High Court held that while the Court should not grant stay of recovery for the asking, at the same time, while considering an application for waiver of pre-deposit, the Court must apply its mind as to whether the appellant has a strong prima facie case on merits. If an appellant having a strong prima facie case on merits is asked to deposit the amount assessed or penalty imposed, it would cause undue hardship to the appellant. 36. In the instant case, the Commissioner (Appeals) has cursorily considered the merits of the case. The learned Tribunal has not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y lead to public mischief, grave irreparable private injury or shake a citizens' faith in the impartiality of public administration, interim relief can be given." 41. The Commissioner (Appeals) inter alia held, in effect, that the service rendered by the petitioner constituted Business Auxiliary Service. The Commissioner observed that service as a Commission Agent was actually covered under Clause 7 of the definition of Business Auxiliary Service and the broad definition of service under Clause 7 was that any service incidental or auxiliary to any activity specified in sub-clauses 1 to 6 would come within the purview of business auxiliary service. The Commissioner was of the view that the services rendered by the petitioner were incidental or auxiliary to the service of procurement of goods and services, which were inputs for the clients. 42. The petitioner contends that the Commissioner (Appeals) did not properly apply his mind to the submissions made on behalf of the petitioner, but cursorily arrived at its conclusion of the service rendered by the petitioner, being covered by the definition of 'Business Auxiliary Service', only to avoid passing order for waiver of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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