TaxTMI 
TaxTMI 
2014 (12) TMI 1098
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....d by the same appellant and are based on same set of facts raising common question of law, as such, they have been heard together and are being decided by this common judgment. Factual matrix of the case, in brief, relevant for the purpose of the case are as under. The appellant claims to be a proprietorship firm having a registration for service tax under the category of 'Construction Work'. It is further claimed that the appellant is a service provider of maintenance/sanitation services at the factory premises of M/s HAL Korwa, Amethi. It is also alleged that the service rendered by the appellant comes under the category of sanitation, on account of which, it has no liability for payment of service tax as the sanitation service does not fall within the net of service tax, but under some confusion and misguidance, it was issued registration under ST-2 in the category of 'Civil Structure Construction Work'. Four notices were issued requiring it to show cause why outstanding of service tax and short payment of service tax, primary education cess, secondary and higher education cess along with interest and penalty, as per the provisions of service tax laws, be not r....
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...., subject to such conditions as it may deem fit to impose in order to safeguard the interest of the revenue. It is well settled that right of appeal is a creature of Statute and if the legislation in its wisdom has imposed certain condition such as pre-deposit for the purpose of maintaining the appeal, normally the Court cannot interfere unless the condition imposed for the exercise of such right are so onerous so as to amount to unreasonable restrictions rendering the said right almost illusory as observed by the Hon'ble Supreme Court in the case of Nand Lal & Anr. Vs. State of Haryana & Ors., AIR 1980 SC 2097. However, in cases where the legislature has conferred the power upon the appellate authority to waive the condition for maintaining the appeal in a particular situation, the question which arises for consideration is whether the appellate authority is bound to examine as to whether the case of waiver has been made out after examining the issues and condition/situation. This question is no longer res integra and has been examined and is being examined by the Courts everyday. Delhi High Court in the case of Sri Krishna Vs. Union of India, 1998 (104) E.L.T. 325 (Del.), ....
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....y, the interest of the Revenue cannot be jeopardized but that does not mean that in order to protect the interest of the Revenue, the Court or authority should not exercise its duty under the law to take into consideration the rights and interest of an individual. -----------" Uniform view of the various High Courts of the country on the question has been that while considering provisions of pre-deposit of duty and penalty, the authority concerned has to examine the question whether the appellant has a good prima facie case so as to justify the dispensation of requirement of pre-deposit of the disputed amount of duty and penalty and the authority must exercise its discretion to dispense with such requirement particularly in a case where appellant satisfies the appellate authority that his case is squarely covered by the decision of a competent court binding on it and in such cases, asking the appellant to deposit the duty demanded and the penalty levied would cause undue hardship to the appellant. Reference may be made to the decision of Karnataka High Court in the case of B.P.L. Sanyo Utilities and Appliances Ltd. Vs. Union of India, 1999 (108) E.L.T. 621, Calcutta High Court in ....
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....ardship but would also cover a case where appellant has a strong prima facie case. For a good or strong prima facie case, it is not necessary for the appellant to satisfy the tribunal that his case is foolproof and is bound to succeed. Strong prima facie case would mean that the case is an arguable one and fit for trial, or prima facie covered by a binding precedent. In such a situation, the tribunal is under a legal obligation to consider the application of waiver taking into account the undue hardship which would require examination of prima facie case, on merits. In the case of I.T.C. Ltd. Vs. Commissioner of Central Excise and Customs (Appeals) & Ors., ILR 2000 Kar. 25, the Karnataka High Court while examining the issue of the pre-deposit under Section 35 of the Act, after considering various pronouncements of the Hon'ble Apex Court and High Courts has held as under: "While considering the case of 'undue hardship', the authority is required to examine the prima facie on merits of the dispute as well. Pleading of financial disability would not be the only consideration. Where the case is fully covered in favour of the assessee by a biding precedent like that of the ....
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....rders do not call for any interference. It is also submitted that there was no prima facie case in favour of the appellant for waiver and, thus, the issue of undue hardship does not merit any consideration and the Tribunal has committed no illegality in passing the impugned orders. We have considered the argument advanced by the learned counsel for the parties and perused the record. The impugned order directing the appellant to deposit 40% of the demand is sans any reason. The order is cryptic running into six lines recording that such cases of maintenance, repair and cleaning service have been heard earlier also and the appellant was directed to deposit 40% of the service tax demanded and report compliance by 11.04.2013. There is no other reason recorded in the order. Neither there is consideration, even worth the namesake of any prima facie case of the appellant nor there is any reason, much less finding with respect to the undue hardship. Hon'ble Apex Court in a recent judgment in the case of Mehsana Dist. Co-OP. Milk P.U. Ltd. Vs. Union of India 2003 (154) E.L.T. 347 (S.C.), while considering the provisions of Section 34 of the Act, 1944, has held as under. "The issue ....