TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 158
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....the assessee providing services to certain other customers also for consideration. The services provided by the appellant fall under Section 65 (97a) and the same are liable for service tax under Section 65 (105) (zzza) of the Act from 16.06.2005. For the period 2007 - 2008 to 2010 - 2011, the adjudicating authority, vide its order dated 28.09.2012 bearing original No.91/2012 directed the appellant to deposit a sum of Rs. 11,73,95,057/- towards short payment of the service tax along with interest thereon since the petitioner deposited only Rs. 1.98 crores towards service tax payable for the said period. Aggrieved by the order of adjudicating authority, an appeal was preferred by the assessee raising several contentions more particularly contending that the claim of the department is barred by limitation since notice was issued beyond one year. During the pendency of the appeal, assessee sought for waiver of pre-deposit by filing a separate application as the assessee has already paid Rs. 1.98 crores towards service tax for the period in dispute. The assessee also furnished copies of the income tax returns, profit & loss account statements and balance sheets for the periods ending....
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....erial on record including the order under challenge the point that arises for consideration is "whether the assessee would suffer undue hardship if the pre-deposit under Section 35-F of the Central Excise Act, 1944 is not waived in Appeal No.ST/3612/2015?" The main grievance of the assessee is that the business of the assessee is running in loss and if pre-deposit is not waived, the assessee would be put to undue hardship. The assessee is undoubtedly a partnership firm, whose liability is joint and several and the partners are also liable for payment of the debts due and statutory liabilities to the department including the respondent herein as per Section 25 of the Partnership Act. According to Section 35-F of the Central Excise Act the assessee is under obligation to make pre-deposit of disputed service tax unless it is waived. According to proviso to Section 35- F of the Central Excise Act, where in any particular case, the Commissioner Appeals or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause "undue hardship" to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such....
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.... part of the demand. There can be no rule of universal application in such matters, and the order should be passed keeping in view the factual aspects involved in the case. The Tribunal does not have the license to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizens faith in the impartiality of public administration, interim relief can be granted.(Benara Valves Ltd. v. Commissioner of Central Excise (2009) 20 VST 297 (SC) = (2006) 13 SCC 347 and M/s. Sri Chaitanya Educational Committee, Poranki, Vijayawada's case (referred supra)). At the same time, besides proof of prima facie case; balance of convenience and irreparable loss must also be taken in to consideration by the Tribunal or the authorities concerned to safeguard the interest of the revenue and impose certain conditions as my be required as held in "Union of India v. Adani Exports Limited (2007) 13 SCC 207 " Before adverting to the facts of the case, it is appropriate to advert to the requirement specified in proviso to Section 35-F of the Central Excise Act and....
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....in his exclusive knowledge and at the same time the Tribunal has to protect the interest of the revenue, while waiving the pre-deposit in view of the proviso to Section 35-F of the Central Excise Act. While dealing with such applications for stay, the Tribunal has to exercise its discretion judiciously and keeping in mind the principles laid down in M/s Sri Chaitanya Educational Committee, Poranki, Vijayawada's case, which are as follows. 1. The applications for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand; 2. Three aspects to be focused while dealing with the applications for dispensing of pre-deposit are: (a) prima facie case, (b) balance of convenience, and (c) irreparable loss; 3. Interim orders ought not to be granted merely because a prima facie case has been shown; 4. The balance of convenience must be clearly in favour of making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the interest of public revenue; 5. While dealing with the applications twin requirements of consideration i.e., consideratio....
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....t the assessee himself disclosed the claim for depreciation to a tune of Rs. 6.80 crores, Sundry Debtors to the tune of Rs. 8.58 crores and loans and advances of Rs. 11.35 crores. Even otherwise, the assessee is a partnership firm, the partners are liable to pay statutory dues to the Government. Therefore, the order of the Tribunal does not indicate that the assessee can sell away the assets and make predeposit. Therefore, the contention of the assessee that to make pre-deposit, it has to sell its fixed assets to comply with the requirement under Section 35-F of the Central Excise Act is not based on any material. On an overall consideration of the material on record, the assessee possessed sufficient means to comply with the requirement of Section 35-F of the Central Excise Act and that the assessee would not be put to financial hardship for compliance of the same. By applying the principles laid down in M/s Sri Chaitanya Educational Committee, Poranki, Vijayawada's case, it is for the Tribunal or any authority to consider prima facie case, balance of convenience and irreparable loss, which are pre-requisites for grant of order under the proviso to Section 35-F of the Central Ex....
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....sessee though disputed the demand on the ground of limitation, but unable to satisfy this Court prima facie that the demand is barred by limitation at this stage. However, it is open to the assessee to raise the question of limitation in an appeal. Therefore, in view of reason in earlier paragraphs, we find no prima facie case or a case to go for trial or arguable case in favour of the assessee. Since the assessee failed to establish prima facie case in its favour, the other two requirements i.e. balance of convenience and irreparable loss need no further consideration in this matter. On an overall consideration of the entire material available on record, the reasoning recorded by the Tribunal does not suffer from any inherent defect or illegality warranting interference by this Court, much less giving rise to substantial question of law which is pre-requisite under Section 35-G of the Central Excise Act and Section 130 of Customs Act. To be 'substantial', a question of law must be debatable, not previously settled by the law of the land or a binding precedent, and must have a material bearing on the decision of the case, if answered either way, in so far as the rights of the par....