2013 (10) TMI 354 - HC - Central Excise

Appeal reinstated in service tax matter, deposit requirements crucial for fair hearing

The Court reinstated the appeal challenging the modification of a stay order in a service tax matter, emphasizing compliance with deposit requirements for ... Application for Modification of Order - Whether the Tribunal is justified to deal with the application for modification of the order without listing the same before the Bench who passed the order – Held that:- The same bench would have disposed of the application for modification appears to be misconceived as a perusal of Rule 31-A makes it abundantly clear that application for rectification of a mistake is to be heard by the same bench which had heard the appeal or otherwise as directed by the President - the order of which modification has been sought, has disposed of the application and not the appeal - Thus, the order has been passed by the Bench presided over by the President is fully within its competence and it is incorrect to say that it travelled beyond its jurisdiction. Whether the Tribunal was justified in dismissing the Misc. Application holding that the Modification Application is in the nature of an application seeking review of the order on merits - the modification of the order has been sought on account of the non-consideration of the facts of the case and the grounds taken in support of the stay cum waiver application – Held that:- The appellant has not deposited the amount as directed by the Tribunal vide order - the date on which none was present on behalf of the appellant - The appellant has stated that non-presence before the Tribunal was for the reason that the train reached late to New Delhi - It is also true that the appeal has been rejected in terms of the order whereby the application for modification was rejected. Section 35-F is not a condition precedent for filing an appeal, but it is certainly a condition precedent for hearing the appeal on merits - Statutory right of appeal subject to condition of deposit shall be treated as a valuable right of the assessee and the Tribunal should not be very harsh on the appellant while exercising the discretionary powers under Section 35-F. There was some misunderstanding as the appellant had never filed any appeal against the requirement of pre-deposit before the High Court, but as stated that he intends to file an appeal before the High Court against the stay order - there was no occasion for the appellant to produce copy of any order passed by the High Court as mentioned in the order -The fact remains that the appeal of the appellant has been dismissed for not complying the earlier orders of the Tribunal without touching the merit - Interest of justice would suffice, if the appeal preferred by the appellant before the Tribunal is restored and decided on merits provided appellant deposited amount – Decided in favour of Assessee. Issues:- Appeal under Section 35-G of Central Excise Act, 1944 for modification of stay order- Controversy over pre-deposit condition for hearing the appeal by the Tribunal- Questions of law regarding the Tribunal's handling of modification applicationAnalysis:The appellant filed an appeal under Section 35-G of the Central Excise Act, 1944, challenging the order for modification of a stay order in a service tax matter. The main issue revolved around the pre-deposit condition set by the Tribunal for hearing the appeal and the subsequent rejection of the appeal due to non-compliance with the pre-deposit order. The appellant argued that the Tribunal's orders dated 10.6.2013 and 25.6.2013 were legally invalid, contending that the modification application should have been heard by the same bench as per Rule 31A of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982.The Tribunal had directed the appellant to deposit a specific amount within a stipulated timeframe, failing which the appeal would be dismissed. The appellant contended that the service tax was wrongly levied, and the amount already deposited was not considered. The Tribunal rejected the modification application on the grounds that it sought a review of the original order. The appellant also argued that the dismissal of the appeal on technical grounds without considering the merit caused prejudice.The Court analyzed the situation and clarified that the Tribunal had the authority to issue the orders as it did, as the modification application related to the stay order and not the appeal itself. The Court emphasized that the deposit requirement under Section 35-F is crucial for hearing the appeal on merits but not for filing the appeal. It highlighted the importance of not being overly harsh on appellants while exercising discretionary powers under Section 35-F.The Court acknowledged the misunderstanding regarding the appellant's intention to challenge the stay order, not the pre-deposit requirement, before the High Court. In the interest of justice, the Court ordered the restoration of the appeal for a decision on merits, provided the appellant deposited a specified amount within a set timeframe. Failure to comply would result in the appeal's dismissal. The Court considered the amount already deposited by the appellant and set a new deposit requirement accordingly.In conclusion, the Court disposed of the appeal by reinstating it for a merit-based decision, emphasizing the significance of complying with deposit requirements for a fair hearing process.