Deposit

CESTAT, Bangalore Bench

Popular Vehicles & Services Ltd.

v.

Commissioner of Central Excise, Cochin

DR. S.L. PEERAN, JUDICIAL MEMBER

AND T.K. JAYARAMNA, TECHNICAL MEMBER

STAY AND APPEAL NO : ST/St/175 of 2006 IN ST/282 of 2006

STAY ORDER NO. 362 OF 2007

FINAL ORDER NO. 489 OF 2007

April 18, 2007

Section 35F of the Central Excise Act, 1944 – Deposit, pending appeal, of duty demanded or penalty levied – Assessee inadvertently had not filed application for waiver of pre-deposit and stay of recovery of service tax demanded from it – Commissioner (Appeals) without pointing out said inadvertent mistake on part of assessee, dismissed its appeal for non-deposit of service tax amount – Whether since no interim order directing assessee to pre-deposit service tax amount was passed in instant matter, an opportunity should be granted to assessee to file application for waiver of pre-deposit – Held, yes – Whether, therefore, impugned order was to be set aside and matter was to be remanded to Commissioner (Appeals) for re-consideration – Held, yes [Para 4]

FACTS

The Commissioner (Appeals) dismissed the appeal of the assessee under section 35F for non-deposit of service tax amount. The assessee challenged the said order on the ground that the Commissioner (Appeals) had not followed the principles of natural justice in as much as he had not called upon the assessee to pre-deposit the amount before dismissing the appeal by an interim order. Furthermore, the assessee by inadvertently had not filed an application for stay of waiver of pre-deposit and stay of recovery and, therefore, the office of the Commissioner (Appeals) ought to have put it to notice.

HELD

The normal procedure before dismissing the appeal for non-deposit under the proviso to section 35F is first to pass an interim order directing the appellants to pre-deposit the amount and put them to notice. On failure to pre-deposit the amounts, the appeal may be dismissed. There was inadvertency on the part of the assessee in not filing an application seeking for waiver of pre-deposit. The assessee’s inadvertent mistake could have been pointed out to the assessee by the office of the Commissioner (Appeals) by issue of a defect memo. In any case as there was no interim order passed in the matter, an opportunity be granted to the assessee to file an application for waiver of pre-deposit for reasons to be made explicit by it in its application. The impugned order was to be set aside and the matter was to be remanded to Commissioner (Appeals) to consider the application filed by the assessee and for giving it an opportunity to pre-deposit the amounts in terms of the interim order. [Para 4]