TaxTMI 
TaxTMI 
TaxTMI 
2013 (10) TMI 1165
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....ction 35F of the Central Excise Act, 1944 (hereinafter referred to as the 'Act') by directing the appellant to deposit 50% of the amount claimed by the revenue. Counsel for the appellant submits that as the CESTAT has recorded a finding that the appellant has an arguable prima-facie case on the issue "whether its activities fall within the definition of "Business Auxiliary Service", so as to exigible to service tax. The CESTAT should have in view of this finding stayed the entire tax component instead of staying only 50% thereof. It is contended that demand of service tax on incentives received from M/s Maruti Suzuki India Limited which accrued on account of sale and purchase of goods, are not exigible to service tax. The incentive....
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....ty, thereby in essence, granting relief more than that was due to the appellant. On merits, counsel for the respondents submits that the Assessing Officer as well as the First Appellate Authority have found as a matter of fact that incentives received by the appellant are exigible to service tax and as this matter has to be finally determined by the CESTAT, the impugned order does not call for any interference much less any relief to be granted to the appellant. We have heard counsel for the parties, perused the impugned order as well as the orders passed by the Assessing Officer and the First Appellate Authority and are in fact surprised that as to why an appeal has been filed. The CESTAT has while considering the prayer for stay of con....
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....ther penalties. The CESTAT has stayed half of this amount after holding that the appellant has an arguable prima-facie case. Section 35F of the Act, reads as follows: - "35F. Deposit, pending appeal of duty demanded or penalty levied: - Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied. Provided that where in any particular case the Commissioner (Appeals) or the Appellate Tribunal is of opinion....
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....ble Supreme Court in "Benara Valves Ltd. V/s Commissioner of Central Excise" 2006(204) ELT 513(SC), would be appropriate so as to place the meaning of the aforesaid expressions and the manner in which they are required to be proved and adjudicated in their correct perspective. A relevant extract from the judgment, reads as follows:- "11. Two significant expressions used in the provisions are "undue hardship to such person" and "safeguard the interests of revenue". Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view. 12. As noted above there are two important expressions in Sect....
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....." A perusal of the above extract reveals that it is for the appellant to establish undue hardship and the mere fact that the demand of duty and penalty may appear to be excessive, is irrelevant if the appellant has not been able to establish "undue hardship". The expression "undue hardship" relates not only to the economic wellbeing of the appellant but also to the merits of the case, thus, requiring the CESTAT to prima-facie appraise the merits and record an opinion for or against the appellant. At this stage, we would like to reiterate an oft repeated principle that an appellate forum while considering legality of an order is confined to ascertaining errors of jurisdiction, a perverse or arbitrary exercise of discretion and whether an ....