IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE:
05. 04.2013 CORAM: THE HONOURABLE Mr.JUSTICE V.DHANAPALAN W.P.No. 4526 of 2013 M/s. Orient Poles 64, Velachery Main Road Sankaran Avenue Opp. Gurunanak College Velacherry Chenna”
042. ... Petitioner -vs- The Commissioner of Central Excise (Appeals) No.26/1, Mahatma Gandhi Road, Nungambakkam Chennai-600 034. ... Respondent Writ Petition under Article 226 of the Constitution of India seeking a Writ of Certiorari to call for the records of the respondent in the impugned proceedings vide Pre-deposit cum Appeal Order No.163 and 164/2013 (M-ST) (PD) dated 07.02.2013 issued under Section 35F Central Excise Act, 1944 read with Section 85 of the Finance Act, 1994 in A.No. 432 of 2011(M-ST) and 627/2012 (M-ST) and quash the same. For Petitioner : Mr. V.S. Manoj for M/s. K.Vaitheeswaran For Respondent : Mr.M.Santhanaraman, SCGSC .. .. .. O R D E R Heard Mr.V.S. Manoj, learned counsel for the petitioner and Mr.M.Santhanaraman, learned Senior Central Government Standing Counsel appearing for the respondent.
2. This Writ Petition is filed challenging the proceedings of the respondent, vide Pre-deposit-cum-Appeal Order No.163 and 164/2013 (M-ST) (PD) dated 07.02.2013 issued under Section 35F Central Excise Act, 1944 read with Section 85 of the Finance Act, 1994 in A.No. 432 of 2011(M-ST) and 627/2012 (M-ST) and quash the same.
3. The case of the petitioner in a nut-shell is as follows:- (a) The petitioner is engaged in supply, erection, installation and commissioning of street lights in the roads/bridges/roads constructed in newly developed airports. The Department issued show cause notice No:
166. 2011 dated 08.04.2011 proposing to impose service tax under the category of erection, commissioning or installation service in terms of Section 65 (39a) of the Finance Act 1994 as amended. (c) The Show Cause Notices were confirmed, vide Order-in-Original Nos.81 and 82 of 2011, dated 02.9.2011 passed by the Additional Commissioner of Service Tax, Service Tax Commissionerate, Chennai, on the ground that as per the definition of Section 65(39a) and CBEC Circular No:
123. 5/2010-TRU dated 24.05.2010 the activity of the appellant falls under the category of Erection, Commissioning or Installation service and that the appellant is liable to pay service tax under Erection, Commissioning or Installation service along with appropriate interest and penalty. (d) Against the said order of the original authority, dated 02.09.2011, the petitioner had filed an appeal along with Stay Petition before the respondent and vide Pre-Deposit-cum-Appeal Order Nos. 163 and 164/2013(M-ST (PD)) in A.No.432/20112 (M-ST) and 627/2012 (MST), dated 07.02.2013, the respondent ordered pre-deposit of Rs.25 lakhs to be paid in cash on or before 28.02.2013 and also observed that if the pre-deposit is not paid, the subject appeal would stand dismissed automatically. Hence, the present Writ Petition is filed for the above relief.
4. The main focus of the arguments advanced by the learned counsel for the petitioner is that the petitioner had filed the appeal along with stay petition against the order of confirmation of the impugned demand passed by the original authority towards Service Tax under Erection, Commissioning or Installation service, with interest and penalty and the impugned order calling upon the petitioner to make pre-deposit amount of Rs.25 lakhs, is on the higher side and it may cause severe hardship to the petitioner. The respondent has not considered the prima-facie case of the petitioner, capacity to pay the amount, merits of the case and the amount involved.
5. On the other hand, learned counsel for the respondent-Revenue submitted that if any person is aggrieved by the order of the original authority, on appeal, it is mandatory to pre-deposit the amount as per the provisions of the Finance Act or the Central Excise Act as the case may be, and in case there is any hardship, it is for the authority concerned to look into the same. In the instant case, the respondent has taken a lenient view while ordering pre-deposit.
6. It is not in dispute that the respondent-authorities initiated action against the petitioner for non-payment of service tax. The original authority has passed an order for payment of (Rs.32,45,393 + Rs.45,33,390/-) and (Rs.27,79,511/- + Rs.33,02,028/-) towards Service Tax with interest and penalty, as against which, the petitioner has gone on appeal before the respondent-Commissioner of Central Excise (Appeals) along with stay petition. After considering the petitioner's grievances, including the prima-facie case, balance of convenience, financial burden and other difficulties, the respondent ultimately came to the conclusion and ordered pre-deposit of Rs.25 lakhs to be paid in cash on or before 28.02.2013 under Section 35-F of the Central Excise Act, made applicable to service tax as per Section 83 of the Finance Act and the balance was waived. It was also observed in the impugned order that if the pre-deposit is not paid as ordered, the subject appeal would stand dismissed automatically.
7. Law is well settled that the capacity of a party to pay the pre-deposit amount had to be noticed and the financial burden and undue hardship for the party to resort to claim waiver of the pre-deposit, have also to be considered. In this regard, learned counsel for the respondent-Revenue relied on a decision of a Division Bench of this Court reported in 2009 (235) ELT 23.(Trendy Moods Vs. Customs, Excise and Gold (Control) Appellate Tribunal, Chennai), wherein, this Court, after taking into account the various decisions of the Supreme Court, for and against, ultimately came to the conclusion that the capacity of the appellant therein to pay the amount having been noticed and in the absence of any financial burden, it cannot be construed that there is an undue hardship for the appellant therein to resort to claim waiver of pre-deposit.
8. The cardinal principle of consideration of the waiver of pre-deposit is based on undue hardship, prima-facie case, balance of convenience, financial burden and other difficulties, expressed by the party before taking the matter on appeal and these factors have to be weighed in relevant circumstances, taking into account all the material facts, which alone can come to the wisdom of the authority to give certain waiver of pre-deposit to the party who is on appeal.
9. With regard to the undue hardship and other difficulties expressed by the petitioner, much less what is now claimed, the respondent himself has come to a conclusion while ordering the pre-deposit amount with a lenient approach. Therefore, in my considered opinion, there is no merit in this writ petition.
10. However, learned counsel for the petitioner made a plea that time may be given to the petitioner for payment of pre-deposit amount as ordered by the respondent-appellate authority in the impugned order and on such payment, the respondent may be directed to dispose of the appeal itself.
11. Taking into account the above submissions made by the learned counsel for the petitioner, the petitioner shall pay the pre-deposit amount as ordered by the respondent in the impugned order, within a period of two weeks from the date of receipt of a copy of this order, and on such payment, the respondent shall dispose of the appeal itself, on merits and in accordance with law, within a period of four weeks thereafter.
12. With the above observations and directions, the Writ Petition is disposed of. No costs. Consequently connected miscellaneous petition is closed. gp To The Commissioner of Central Excise (Appeals) No.26/1, Mahatma Gandhi Road, Nungambakkam, Chenna”
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