Venus Rubbers vs Commissioner Of Central Excise

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No.ST/S/434/12 & ST/527/2012

[Arising out of Order-in-Appeal No.CMB-CEX-000-APP No.105/12 dt. 21.5.2012 passed by the Commissioner of Central Excise (Appeals), Madurai]

Venus Rubbers Appellant

Versus

Commissioner of Central Excise, Coimbatore Respondent

Appearance:

Shri S.Muthuvenkatraman, Advocate For the Appellant

Shri L. Paneer Selvam, AC (AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 10.6.2015

FINAL ORDER No.40622/2015

Per R. Periasami

The present appeal is filed by appellant against Commissioner (Appeals) order who dismissed the appeal for non-compliance of predeposit under Section 35F read with Section 83 of the Finance Act. The adjudicating authority in his order dt. 26.8.2011 confirmed the demand of service tax of Rs.32,09,148/- under maintenance or repair service along with interest and also imposed equivalent penalty. He also imposed penalties under Section 77. On appeal, the LAA has ordered for predeposit of 50% of tax and penalty. Appellant filed modification petition before Commissioner (Appeals) against the interim order. However, Commissioner (Appeals) has dismissed the appeal for non-compliance as well as on merit. The LAA's order was challenged before Tribunal. The Tribunal vide Final order No.40596/2013 dt. 22.11.2013 set aside the LAA's order to that extent of dismissing the appeal on merits but sustained the order to the extent of ordering for predeposit. Aggrieved by the order, appellant preferred C.M.A before the Hon'ble High Court, Madras. The Hon'ble High Court vide its order dt. 25.7.2014 in C.M.A.No.703/2014 and MP No.1/2014 set aside the Tribunal's order and remanded the case to Tribunal to consider the issue of predeposit. The relevant para of the High Court's order dt.25.7.2014 is reproduced below :-

(g) While disposing of an appeal against a final order of the appelalte Commissioner, (dismissing an appeal for failure of pre-deposit), the Tribunal shall not adjudicate upon the merits of the appeal. If the order of pre-deposit passed by the Commissioner (Appeals), in the given facts and circumstances is erroneous, the Tribunal is required to set aside the order of the appellate authority and remit the matter to the appellate Commissioner for denovo consideration, afer passing an appropriate order as to pre-deposit.

12. We find that in pars-30 (g) of the abovesaid decision, the Tribunal has clearly held that in an appeal against the final order of the Appellate Commissioner (dismissing the appeal for failure to pre-deposit), the Tribunal will not adjudicate upon the merits of the appeal, but if the order of pre-deposit passed by the Commissioner (Appeals) in the given facts and circumstances of the case is erroneous, the Tribunal is required to set aside the order of the Appellate Authority and remand the matter to the Appellate Commissioner for de novo consideration after passing an appropriate order as to pre-deposit. We find that this exercise has not been done by the Tribunal in the present case and it has summarily upheld that the rejection of the appeal for failure of pre-deposit is impeccable and, therefore, we have no hesitation to hold that the Tribunal should have considered the pre-deposit issue perforce and to that extent the order has been rightly put to test by the appellant before this Court. Learned standing counsel for the Department, when pointed out about the error in the order, also fairly submits that the Tribunal should have considered the issue of pre-deposit on merits instead of confirming the order of the Commissioner (Appeals) as impeccable without setting out how it is above standards. In the light of the discussion as made above, the 2nd substantial question of law is answered in favour of the assessee.

13. In the result , the appeal is allowed and the matter is remitted back the to the Appellate Tribunal to consider the issue of pre-deposit in the light of the position as discussed above. Consequently, connected miscellaneous petition is closed. However, there shall be no order as to costs.

Accordingly, the appeal was restored to its original number and the stay application was listed. Subsequently, the appellant also changed their vakalat and again it was listed on 11.5.2015 and 8.6.2015.

4. Ld. Advocate for the appellant submits that major part of the demand is hit by limitation. He submits that on an identical issue, SCN was issued to the same appellant for an earlier period which was dropped by the original authority.

5. On the other hand, Ld. A.R reiterated the order. This is a case where the LAA dismissed the appeal for non-compliance. Hence he pleaded for predeposit.

6. Heard both sides. We find that in this appeal the LAA has dismissed the appeal for non-compliance of predeposit, even though appellate authority mentioned that appeal is decided on merit. The appellate authority has not discussed the issue on merits and dismissed the appeal for non-compliance. Therefore the case to be remitted to L.A.A. We also find that appellant made a submissions before the lower authorities on limitation which was not examined. Taking into overall facts and circumstances, we direct the appellant to make a deposit of Rs.5,00,000/- (Rupees Five lakhs only) within 8 weeks and to report compliance by 19.8.2015. Upon compliance, they shall produce the proof of deposit before Commissioner (Appeals) who shall decide the appeal on merits. Accordingly, the appeal is allowed by way of remand in the above terms.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

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