2014 (9) TMI 534 - HC - Central Excise

High Court overturns dismissal orders, emphasizes fair opportunity for appellant in pre-deposit application and appeal

M/s Star Construction, Chandigarh Versus Commissioner of Central Excise, Chandigarh-I

The High Court set aside the orders dismissing the stay application and appeal due to the unintentional absence of the appellant's counsel. The matter was ... Stay Application under Section 35F - Non appearance of assessee - Held that:- Reason given for non-appearance of the counsel for the assessee before the Tribunal at the time fixed appears to be unintentional and bonafide. Accordingly, the order dated 30.10.2013 dismissing the stay application in default and directing the appellant to deposit 100% of the demand duty is set aside. As a necessary corollary, the order dated 11.2.2014 passed by the Tribunal in pursuance thereof, whereby the appeal of the assessee was dismissed for failure of non-deposit is also set aside. The matter is remitted to the Tribunal to decide the application for pre-deposit afresh in accordance with law after affording an opportunity of hearing to the petitioner - Decided in favour of assessee. Issues:1. Appeal under Section 35G of the Central Excise Act against Tribunal's order2. Justification of Tribunal's decision on demand, penalty, and interest under Finance Act, 19943. Dismissal of appeal by Tribunal regarding taxability of composite contracts4. Duty of Tribunal to pass order on merits despite non-pre-deposit by Appellant5. Revenue's contradictory stand on recovery of Service Tax6. Allegations of manifest injustice by the appellant7. Tribunal's decision on pre-deposit amount and penalty8. Tribunal's obligation to pass order on Stay Application under Section 35F9. Hardship caused by unjust pre-deposit directions contrary to Section 35F provisionsAnalysis:1. The appellant challenged the Tribunal's order under Section 35G of the Central Excise Act, questioning the demand, penalty, and interest imposed. The primary issue was the appellant's entitlement to abatement under a specific notification, which the Tribunal had confirmed. The appellant also raised concerns about the dismissal of the appeal by the Tribunal regarding the taxability of composite contracts and the duty of the Tribunal to pass an order on merits even without pre-deposit.2. The Tribunal had confirmed the demand of service tax, penalty, and interest, leading to the appellant's appeal. The appellant argued that they were entitled to abatement under a specific notification, questioning the Tribunal's decision. The Tribunal's dismissal of the appeal raised concerns about the taxability of composite contracts and the duty to pass an order on merits despite non-pre-deposit by the Appellant.3. The appellant also contested the Revenue's contradictory stand on the recovery of Service Tax, claiming manifest injustice had been done. The Tribunal's decision on the pre-deposit amount and penalty was a key issue, along with the obligation to pass an order on the Stay Application under Section 35F and the alleged hardship caused by unjust pre-deposit directions.4. The High Court, after hearing both parties, found the non-appearance of the appellant's counsel before the Tribunal to be unintentional and bonafide. Consequently, the orders dismissing the stay application and the appeal for non-deposit were set aside. The matter was remitted to the Tribunal to decide the pre-deposit application afresh, ensuring a fair opportunity for the appellant and passing a detailed order before deciding the appeal.