Tribunal grants appeal for remand, sets Rs.5 lakh pre-deposit, criticizes lower authority's informal directive.

The Tribunal allowed the appeal for remand, directing a proper pre-deposit of Rs.5 lakhs within four weeks for further consideration by the lower appellate authority. The lower appellate authority's informal pre-deposit directive during a personal hearing was criticized as impermissible under law. The case was to be decided on merit after compliance with legal procedures, providing adequate hearing opportunities to the appellant.

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Issues involved:
- Appeal against Service Tax demand for laying of cables, installation of electrical equipment, street lights, and transformers.
- Dismissal of appeal by lower appellate authority for non-compliance with Section 35F of the Central Excise Act, 1944.
- Dispute over tax liability on installation services.
- Legality of the pre-deposit directive by the lower appellate authority.

Analysis:
1. The appellant, engaged in activities like laying cables, installing electrical equipment, street lights, and transformers, faced a Service Tax demand of Rs.45,86,154 for the period 11.07.2005 to 30.03.2007. The Commissioner confirmed the demand, imposed penalties, and directed a pre-deposit of Rs.20 lakhs for appeal compliance. The lower appellate authority dismissed the appeal due to non-compliance with Section 35F.

2. The appellant argued that most activities related to cable laying, particularly for M/s MIDC, were non-taxable per Circular No. 123/05/2010-TRU. However, they acknowledged potential tax liability for installation services, believing otherwise in good faith.

3. The Revenue contended that the appellant's activities encompassed taxable services like street light and transformer installations, as per the Circular, warranting tax liability. The appellant estimated a reduced liability of approximately Rs.3.5 lakhs if tax was due on certain installations.

4. The Tribunal noted the absence of an interim stay order by the lower appellate authority, criticizing the informal pre-deposit directive during a personal hearing as impermissible under law. The Tribunal directed a proper pre-deposit of Rs.5 lakhs within four weeks for further consideration by the lower appellate authority, emphasizing compliance with legal procedures.

5. Consequently, the Tribunal allowed the appeal for remand, requiring compliance with the revised pre-deposit terms and a fresh hearing by the lower appellate authority to decide the case on merit after providing adequate hearing opportunities to the appellant. The stay application was also resolved in the process.

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