Pre-deposit in service tax appeal: partial waiver upheld, dismissal set aside, and matter remanded for fresh hearing.

Complete waiver of pre-deposit for service tax and penalty was not justified; the Tribunal upheld the Commissioner (Appeals)' direction to deposit the amount fixed as a condition for hearing the appeal. Where the appeal had been dismissed for non-compliance with the pre-deposit requirement and not decided on merits, the order was set aside and the matter remanded for fresh adjudication after affording an opportunity of hearing, subject to compliance with the stipulated deposit.

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Issues: Whether the assessee was entitled to total waiver of pre-deposit of service tax and penalty, and whether the dismissal of the appeal by the Commissioner (Appeals) for non-compliance with Section 35F of the Central Excise Act warranted remand.

Analysis: The Tribunal held that the case did not justify complete waiver of pre-deposit. It upheld the direction to deposit the amount fixed by the Commissioner (Appeals) for the appeal to be heard, while granting waiver of the balance pre-deposit on compliance. Since the Commissioner (Appeals) had not decided the appeal on merits, the order was set aside and the matter was sent back for fresh decision after affording an opportunity of hearing, subject to deposit of Rs. 2 lakhs.

Conclusion: The assessee was not granted total waiver, but the impugned order was set aside and the matter was remanded for fresh adjudication on compliance with the stipulated pre-deposit.

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