Customs, Excise and Gold Tribunal - Tamil Nadu
Focused Corporate Services (I) (P) Ltd. vs Cce on 21 June, 2007
ORDER P.G. Chacko, Member (J)
1. This application filed by the appellants is for restoration of their appeal which was allowed by way of remand vide Final Order No. 177/2007 dated 28.2.2007, which was passed ex parte. That final order directed the appellants to predeposit Rs. 10.00 lakhs with the lower appellate authority and directed the appellate authority to deal with their appeal on merits, subject to such deposit. In the present application, it is submitted, it was without considering many of their submissions that learned Commissioner (Appeals) directed them to predeposit Rs. 10.00 lakhs in the earlier round of litigation. It is submitted that nearly Rs. 10.00 lakhs had already been deposited by them and that this fact was borne on record before the lower appellate authority Learned Counsel refers to the memo of appeal and submits that an amount of Rs. 2,13,137/- had been paid as service tax for the period from July 2003 to July 2004 and further that an amount of Rs. 7,88,245/- was also paid as service tax for the period from September 2004 to September 2005. These payments were not taken into account by learned Commissioner (Appeals). Learned Counsel has also adverted to the merits of the case and has claimed that the appellants had a good case before the lower appellate authority, which was not properly appreciated. We have heard learned SDR also.
2. After considering the submissions of learned Counsel, which are supported by documents filed today, we are of the view that the above payments should be treated as a predeposit for the purpose of the appeal before the lower appellate authority. Accordingly, after recalling Final Order No. 177/2007 dated 28.2.2007, we pass the following FINAL ORDER:
1. This application is for waiver of predeposit and stay of recovery in respect of an amount of service tax of Rs. 33,56,289/- demanded from the appellants as also in respect of a penalty of Rs. 60 lakhs imposed on them. Against the decision of the original authority confirming the above demand of tax and imposing the above penalty, the appellants preferred appeal to the Commissioner (Appeals) and also filed therein an application for waiver of predeposit and stay of recovery. By order dated 4.7.2006, the appellate authority directed the appellants to predeposit an amount of Rs. 10 lakhs under Section 35F of the Central Excise Act on or before 25.7.2006. The party thereupon filed an application for reconsideration of the said order, which was not considered by the appellate authority in the absence of any provision of law enabling it to consider such an application. Eventually, in the absence of evidence of predeposit, learned Commissioner (Appeals) dismissed the assessee's appeal for non-compliance with Section 35F of the Act. Hence the present appeal and application before us.
2. Learned Counsel prays for fresh remand of the case to the Commissioner (Appeals). We have heard learned SDR also.
3. After considering the submissions, we are of the view that the appeal itself can be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we proceed to deal with the appeal.
4. The relevant show-cause notice was issued to recover service tax from the appellants in respect of the services rendered by them to their clients during the period 1.7.2003 to 31.12.2004. Their clientele included banks and other financial institutions, industrial organizations etc. Under agreements or memoranda of undertaking with such clients, the appellants were carrying out the following functions:
Marketing of credit cards: Identifying customers, canvassing for credit cards, advertise by display materials, procure applications for cards and submit the same to the bank Personal loans: Identifying potential customers, receiving applications for loans and forwarding them to the bank for approval.
Housing loans: Sourcing customers and marketing housing loan products.
Collection service: Collection of outstanding amounts of the financial institutions from the borrowers and amounts due from the subscribers of Mobile companies and remitting the same to the respective clients.
Administrative Assistance: Maintenance of building of the principals, payment of various bills like electricity, telephone etc. supervision of vendors, supervision of security, maintenance of various registers for the running of generator, lifts, security etc.
5. The original authority classified the above services in the category of "Business Auxiliary Services" which were exigible to service tax w.e.f. 1.7.2003 under the Finance Act, 1994 as amended. That authority found that the appellants had neither got themselves registered with the department for the purpose of service tax nor paid such tax on the gross amounts collected by them from their clients during the above period. The authority also found suppression of facts by the assessee. Accordingly, it confirmed the demand of tax against the party and imposed on them the penalty.
6. After examining the materials presented today before us by learned Counsel, it appears to us that the payments already made by the appellants amounting to nearly Rs. 10.00 lakhs are liable to be treated as a predeposit under Section 35F of the Central Excise Act by the lower appellate authority for maintaining their appeal on merits. Accordingly, we set aside the impugned order and direct the Commissioner (Appeals) to deal with the assessee's appeal (filed against the order of the Addl. Commissioner) on merits in accordance with law after giving the appellants an effective opportunity of being heard, without insisting on any further deposit. The appeal stands allowed by way of remand.
(Dictated and pronounced in open Court)