Tribunal grants condonation of delay in compliance with Section 35F, accepts third-party evidence on pre-deposit

The Tribunal allowed the application for condonation of delay, considered compliance with Section 35F, and accepted the plea regarding the pre-deposit amount based on evidence of a third party's discharge of service tax liability. The decision aligned with the High Court's direction, ensuring a fair hearing for the appellant without imposing an additional pre-deposit condition.

---

---

Issues:
1. Condonation of delay in filing the appeal before the Tribunal.
2. Compliance with mandatory provisions of Section 35F of the Central Excise Act, 1944.
3. Consideration of plea regarding pre-deposit amount in the appeal.
4. Discharge of service tax liability by a third party under reverse charge mechanism.

Condonation of Delay:
The appellant filed an application for condonation of delay of 70 days in filing the appeal before the Tribunal. The High Court's direction to consider the plea of the appellant on the stay petition implied that any delay should be condoned. The application for condonation of delay was allowed based on this direction.

Compliance with Section 35F:
The mandatory provisions of Section 35F of the Central Excise Act, 1944 require a pre-deposit of 7.5% of the demands confirmed if the order challenged is passed by the Commissioner as an Adjudicating Authority. In this case, the impugned order was indeed passed by the Commissioner. The appellant argued that part of the tax amount was discharged by a third party under the reverse charge mechanism. Evidence provided included a certificate from a Chartered Accountant and a letter from the third party certifying the payment.

Consideration of Plea on Pre-Deposit:
The demands on the appellant were related to Clearing and Forwarding service, C&F Agent Service, and Business Support services. The third party, Hindustan Unilever Limited, had discharged a significant amount of the service tax liability under the reverse charge mechanism on the freight charges incurred by the appellant. The total demands confirmed on the appellant were approximately Rs. 4.31 crores, with a pre-deposit requirement of around Rs. 32 lakhs. Considering the evidence provided by Hindustan Unilever Limited, the Tribunal held that the provisions of Section 35F were satisfied, allowing the appeal to proceed without any further pre-deposit requirement.

Discharge of Service Tax Liability by Third Party:
The certificate issued by Hindustan Unilever Limited indicated a discharge of service tax liability of approximately Rs. 75 lakhs, which could be subsumed in the demands raised against the appellant. The Tribunal found this discharge sufficient to meet the pre-deposit requirement under Section 35F, directing the registry to list the appeal for disposal without any additional pre-deposit condition. The stay petition was disposed of accordingly.

In conclusion, the Tribunal allowed the application for condonation of delay, considered the compliance with Section 35F, and accepted the plea regarding the pre-deposit amount based on the evidence of the third party's discharge of service tax liability. The decision was in line with the High Court's direction, ensuring a fair hearing for the appellant without imposing an additional pre-deposit condition.

---