TaxTMI 
TaxTMI 
TaxTMI 
Dear Professional Colleague,
“Where Pre-deposit of principal demand of Service tax has been waived off, CESTAT cannot order of pre-deposit for consequential interest component as a condition precedent for hearing appeal”
We are sharing with you an important judgment of Hon’ble High Court, Punjab and Haryana, in the case of Punjab Chemicals & Corp Protection Ltd. Vs. Commissioner of Central Excise, Chandigarh-II [2014 (5) TMI 985 - PUNJAB & HARYANA HIGH COURT] on the following issue:
Issue:
Whether the CESTAT order for pre-deposit of consequential interest component as a condition precedent for hearing appeal is justified when Pre-deposit of principal demand of Service Tax has been waived off?
Facts & background:
In the instant case, the Hon’ble CESTAT disposed off the Stay Application filed by Punjab Chemicals & Corp Protection Ltd. (“the Appellant”) and stayed the entire demand of Service tax amounting to ₹ 35,14,534/-. However, the Appellant was directed to pay interest component on the Service tax amount within four weeks failing which the appeal shall be rejected.
Held:
The Hon’ble High Court Punjab & Haryana held that once the realization of the principal liability was stayed and condition of pre-deposit was waived off, it would not be proper to direct that the entire interest component on the Service tax assessed be deposited as a condition precedent for hearing of the appeal. Hence, pre-deposit of interest was set aside.
Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us.
Thanks & Best Regards,
Bimal Jain
FCA, FCS, LLB, B.Com (Hons)
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