Court eases pre-deposit rule for challenging tax liability, allowing appeal to proceed.

The court modified the pre-deposit condition in a case challenging a Commissioner's order on service tax liability, allowing the petitioner to proceed with the appeal without depositing the full demanded amount. The petitioner was directed to deposit the already paid sum and the appeal to proceed for merit consideration without undue hardship.

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Issues involved:
1. Challenge to the order of the Commissioner (Appeals-II) regarding the stay on recovery proceedings during the pendency of an appeal against the Order-in-Original.

Analysis:
1. The petitioner challenged the order dated 30.01.2014 by the Commissioner (Appeals-II) directing the deposit of service tax amounting to Rs. 27,22,638 within two weeks, with a stay on recovery of interest and penalty until the appeal's disposal. The appeal arose from an order dated 11.11.2011 by the Joint Commissioner, Central Excise, Jaipur, regarding service tax liability on commission payments made by the petitioner's Online Business Marketing Division. The Joint Commissioner ordered recovery of service tax, interest, and penalty.

2. The petitioner, in the appeal, had deposited 50% of the ordered amount before filing the writ petition. The petitioner contended that the activity did not attract service tax liability, causing undue hardship if forced to pay the demanded amount. The respondent's counsel supported the impugned order, citing it as a statutory requirement without the need for interference.

3. After considering both parties' submissions and the case records, the court noted the petitioner's arguable case and the potential for undue hardship. The court decided to modify the pre-deposit condition to prevent undue hardship. The court allowed the petitioner to proceed with the appeal without depositing the full principal demand amount.

4. The court clarified that the modification did not affect the merit consideration of the appeal. The order directed the petitioner to deposit the already paid amount of Rs. 13,61,321, and the Appellate Authority to schedule a hearing and proceed with the appeal accordingly. The court emphasized that the modification aimed to serve justice in the given circumstances without influencing the appeal's merit determination.

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