TaxTMI 
TaxTMI 
TaxTMI 
2014 (7) TMI 706
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....50 Crores for entertaining an appeal in terms of Section 35-F of the Central Excise Act, 1944. 4.1. The brief facts of the case are as under: The appellant is engaged in the business of providing mining services to Thakurani Mines and Nuagaon Mines. The appellant entered into two agreements with the persons holding mining licenses one for providing mining services and the other for purchasing the goods exclusively by the appellant from the license holders. We are now concerned with the agreement relating to providing of mining services and in terms of the said agreement, the owner of the mine has to pay a sum of approximately Rs. 60/- per Ton for Lump Ore and Rs. 40/- per Ton for Natural Fines to the appellant. 4.2. The service tax, which is the subject matter of the present appeals, relates to the years 2007-2008 and 2008-2009. On the amount received under the agreement for providing mining services, the appellant paid service tax to the department to the tune of Rs. 2.90 Crores. The department appears to have raised a dispute taking note of certain expenses shown by the appellant in the Profit and Loss Account Worksheet-III, which include the heads Over Burden Removal; Raising ....
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....nance Act, 1994, whereas the transaction in the present case falls under Section 67(1)(i) of the Finance Act, 1994. 4.7. The above plea of the appellant was not accepted by the Tribunal, resulting in ordering payment of pre-deposit of Rs. 2.50 Crores within eight weeks from the date of the said order (4.11.2013). Assailing the said order dated 4.11.2013 passed by the Tribunal, C.M.A.No.285 of 2014 is filed. In view of the non-compliance of the said above order, the appeal was dismissed by the Tribunal by order dated 21.3.2014, challenging which C.M.A.No.1320 of 2014 is filed. 5. Heard Mr.Arvind P.Datar, learned Senior Counsel appearing for the appellant and Mr.V.Sundareswaran, learned Standing Counsel appearing for the first respondent and perused the documents filed in support of these appeals. 6. We find that there are two specific agreements one in respect of providing mining services and other in respect of purchase of goods. One is independent of the other. However, insofar as the service tax component is concerned, the department is proceeding on a premise that there is suppression of value. That issue will have to be decided on the touchstone of Section 67(1)(i) of the Fi....
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....tion 67(1)(i) of the Finance Act, 1994. This plea of the appellant establishes prima facie case for considering the request for waiver of pre-deposit. 10. The issue as to whether the back to back agreements entered into between the appellant and the service recipients was a method adopted by the appellant to suppress the value of services is also a question that should be answered in the appeal on considering Section 67(1)(i) of the Finance Act, 1994. As to whether such a transaction is opposed to the provision of law has not been considered by the Original Authority itself and that cannot be a ground for, prima facie, rejecting the value stated by the appellant. 11. In this regard, it is apposite to refer to a decision of the Supreme Court in Benara Valves Ltd. v. CCE, (2006) 13 SCC 347, wherein it has been held as under: "8. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine manner unm....
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.... considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interests of the Revenue have to be kept in view. 12. As noted above there are two important expressions in Section 35-F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka, (1993) 3 SCC 467 that under Indian conditions expression undue hardship is normally related to economic hardship. Undue which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. 13. For a hardship to be undue it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. 14. The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. ....