2014 (10) TMI 279 - AT - Service Tax

Appellate Tribunal overturns decision on pre-deposit requirement, emphasizes written communication for compliance.

KRISHNA DEVELOPERS Versus COMMISSIONER OF CENTRAL EXCISE, KOLHAPUR

The appeal before the Appellate Tribunal CESTAT MUMBAI was allowed, setting aside the Order-in-Appeal dismissing the appeal of M/s. Krishna Developers for ... Waiver of pre deposit - Section 35F - Held that:- Appellants have failed to make a pre-deposit of the entire amount of Service Tax and interest, directed during the course of personal hearing held on 16-11-2011, as required in terms of the provisions of Section 35F of the Central Excise Act, 1944, till date, although they were required to submit compliance thereof by 7-12-2011 - appellant has been orally communicated and the order of pre-deposit has not been issued as envisaged under Section 37C of the Central Excise Act read with Section 83 of the Finance Act, 1994. Matter remanded back - Decided in favour of assessee. Issues Involved:Appeal against dismissal due to non-compliance with pre-deposit under Section 35F of the Central Excise Act, 1944; Proper service of order for pre-deposit as per Section 37C of the Central Excise Act; Communication of pre-deposit order in writing; Applicability of oral communication for pre-deposit orders.Analysis:The appeal before the Appellate Tribunal CESTAT MUMBAI was directed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Pune-II, which dismissed the appeal of M/s. Krishna Developers for non-compliance with the pre-deposit requirement under Section 35F of the Central Excise Act, 1944. The appellant contended that they had not received any order from the lower appellate authority for pre-deposit, leading to their failure to comply with the direction. This raised the issue of proper service of the pre-deposit order as per Section 37C of the Central Excise Act, which mandates specific methods for serving decisions, orders, summons, or notices. The Tribunal noted that the impugned order indicated oral communication of the pre-deposit requirement, highlighting the importance of written communication in compliance with the law.In the judgment, it was emphasized that under Section 37C of the Central Excise Act, 1944, any decision or order must be served through specified methods, including registered post or affixing a copy at the intended person's place of business or residence. The Tribunal observed that the appellant in this case had not received a written order for pre-deposit as required by law, raising doubts about the validity of oral communication alone. Consequently, the Tribunal set aside the impugned order and directed the lower appellate authority to reconsider the case. The Tribunal stressed that any order for pre-deposit should be communicated in writing in accordance with the statutory provisions, clarifying that oral communication does not suffice under the law.As a result of the judgment, the appeal was allowed by way of remand, and the stay application was disposed of. The Tribunal ordered the maintenance of status quo, instructing the department not to take coercive action against the appellant while the case was being reconsidered. This comprehensive analysis addressed the issues of compliance with pre-deposit requirements, proper service of orders under the Central Excise Act, and the necessity of written communication for legal validity, ensuring procedural fairness and adherence to statutory provisions in the adjudication process.