Custom, Excise & Service Tax Tribunal
Orchid Container Line P. Ltd vs Cgst Ghaziabad on 24 September, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.70490 of 2024
(Arising out of Order-in-Appeal No.GZB-EXCUS-000-APPL-MRT-147-23-24
dated 30/10/2023 passed by Commissioner (Appeals) Central Goods &
Services Tax, Ghaziabad)
M/s Orchid Container Line P. Ltd., .....Appellant
(3-F.C.S-68, Ansal Plaza,
Vaishali, Ghaziabad-201010)
VERSUS
Commissioner of Central Excise &
CGST, Ghaziabad ....Respondent
(Commissionerate, CGST, Ghaziabad) APPEARANCE:
Shri Rajesh Chhibber, Advocate for the Appellant Shri A.K. Choudhary, Authorised Representative for the Respondent CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO.70871/2024 DATE OF HEARING : 24 September, 2024 DATE OF DECISION : 24 September, 2024 SANJIV SRIVASTAVA:
This appeal is directed against Order-in-Appeal No.GZB- EXCUS-000-APPL-MRT-147-23-24 dated 30/10/2023 passed by Commissioner (Appeals) Central Goods & Services Tax, Ghaziabad. By the impugned order following has been held:-
"4.9 In light of the cited facts and findings in their entirety, I find that the subject appeal is deficient in terms of mandatory pre-deposit and also does not hold ground on factual and statutory merits. Accordingly, I find no reason to interfere with the subject order of the adjudicating authority."
Service Tax Appeal No.70490 of 2024 2 2.1 Appellant is engaged in providing taxable services under the provisions of Finance Act, 1994 and also availing facility of Cenvat credit.
2.2 During the course of audit it was observed that during the period from April, 2017 to June, 2017 appellant have shown taxable income of Rs.10,85,68,474/- in the trial balance whereas for the same period they filed NIL ST-3 return in which they have not shown any income as liability.
2.3 Show cause notice dated 09.06.2020 was issued to the appellant asking them to show cause as to why-
"(i) An amount of Rs. 1,62,85,271/- (Rupees One Crore Sixty Two Lakhs Eighty Five Thousand Two Hundred Seventy One only), as mentioned supra should not be demanded & recovered from them under to Section 73(1) of the Finance Act, 1994, Section 142 and 174(2) of Central Goods & Services Tax Act, 2017.
ii) Interest on the amount mentioned above at (i) should not be demanded & recovered from them with Section 75 of the Finance Act, 1994, Section 142 and 174(2) of Central Goods & Services Tax Act, 2017
(iii) Penalty should not be imposed upon them under Section 78 of the Finance Act, 1994, Section 142 and 174(2) of Central Goods & Services Tax Act, 2017."
2.4 This show cause notice was adjudicated as per the Order- in-Original dated 31.03.2021 observing as follows:-
"ORDER
1. I confirm the demand of Rs 1.62,85,271/- (Rupees One Crore Sixty Two Lakhs Eighty Five Thousand Two Hundred Seventy One only) to berecovered from them under to Section 73(1) of the Finance Act, 1994, Section 142 and 174(2) of Central Goods & Services Tax Act, 2017.
2. I confirm the demand of Interest amount mentioned above at (i) to be recovered from them with Section 75 of the Service Tax Appeal No.70490 of 2024 3 Finance Act, 1994, Section 142 and 174(2) of Central Goods & Services Tax Act, 2017.
3. I impose the equal penalty under Section 78 of the Finance Act, 1994 read with Section 142 and 174(2) of Central Goods & Services Tax Act, 2017.
Party may avail benefit of reduced penalty of 25% of penalty amount adjudged under Section 78 of the Finance Act, 1994 as per lind proviso to Section 78 of Finance Act, 1994 as amended provided party pays confirmed demand and interest and reduced penalty within thirty days of receipt of this order."
2.5 Aggrieved appellant filed appeal before Commissioner (Appeals), who vide order dated 23.12.2021 remanded the matter observing as follows:-
"12. In view of the foregoing, I come to the conclusion that in the present case department has failed to provide the appellant fair hearing and opportunity to represent their case. It is a firmly established rule of common law that a judge or anyone exercising a judicial function must hear both sides of every case: not only the plaintiff or prosecutor, but also the defendant must be heard. This rule is recognized as one of fundamental rules of justice, and a failure to observe It makes the whole proceedings defective and voidable.
13. Regarding remand of case for scrutiny and verification of the documents, which is necessary to arrive at the correct tax liability of the appellant, I rely on the decision of the Hon'ble Tribunal in the case of Commissioner of Central Excise, Indore Vs Mittal Appliances Ltd. 2009(239)ELT 224(Tri. Del.) and also on the decision of Hon'ble High Court of Madras in A.S. Bahu Sah Designs vs. Commissioner of C.Ex. Appeals, Chennai-I-2020(38) GSTL 161(Mad.).
14. In view of the above discussion and findings, I hereby set aside the Order-in-original No. Service Tax Appeal No.70490 of 2024 4 24/JC/S.TAX/GZB/2020-21 dated 31.03.21 issued under C.No. V(15)Adj./GZB/Orchid Container/16/2020/1007 Dated 08.07.2021 by the Joint Commissioner, Central Goods and Service Tax, Ghaziabad and remand the matter to the adjudicating authority for denovo adjudication in the light of above observations. The appellant is directed to furnish all requisite documents/records to the adjudicating authority for verification/scrutiny. The appeal bearing no. 21-ST/Appl- MRT/GZB/2021-22 DATED 13.09.2021 is disposed-off in above terms."
2.6 Matter was again adjudicated in the remand proceedings vide order dated 20.06.2022 by holding as follows:-
"ORDER
1. I confirm the demand of Rs. 1,62,85,271/- (Rupees One Crore Sixty Two Lakhs Eighty Five Thousand Two Hundred Seventy One only to be recovered from them under to Section 73(1) of the Finance Act, 1994, Section 142 and 174(2) of Central Goods & Services Tax Act, 2017. Since party had already deposited Service Tax of Rs. 4,13,909/-,the same may be appropriated from the confirmed amount of demand and thus, net amount of Rs. 1,58,71,362/-(Rs. 1,62,85,271-Rs.4,13,909), is liable to be recovered from them.
2. I confirm the demand of Interest amount mentioned above at (1) to be recovered from them with Section 75 of the Finance Act, 1994, Section 142 and 174(2) of Central Goods & Services Tax Act, 2017.
3. I impose the equal penalty Rs. 1,62,85,271/- (Rupees One Crore Sixty Two Lakhs Eighty Five Thousand Two Hundred Seventy One only) under Section 78 of the Finance Act, 1994 read with Section 142 and 174(2) of Central Goods & Services Tax Act, 2017. If the party opts to deposit the amount of service tax along with appropriate interest & penalty within 30 days of receipt Service Tax Appeal No.70490 of 2024 5 of this order so confirmed, the penalty is reduced to 25% of the amount of service tax in terms of second and third proviso of section 78(1) of Finance Act, 1994 as amended;"
2.7 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been dismissed for want of mandatory pre- deposit as per the impugned order above.
2.8 Aggrieved appellant have filed this appeal.
3.1 We have heard Shri Rajesh Chhibber learned Counsel appearing for the appellants and Shri A.K. Choudhary learned Authorised Representative appearing for the revenue.
4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument.
4.2 We find that appeal has been dismissed primarily for want of mandatory pre-deposit, the relevant findings of the impugned order is reproduced as under:-
"4.3 Further, I find that that as per the provisions of Section 35F of the Central Excise Act, 1944, as made applicable to service tax matters vide Section 83 of the Finance Act, 1994, proof of mandatory pre-deposit of seven and a half percent of the duty, in case where duty or duty and penalty are in dispute, has to be submitted while filing the appeal under the provisions of Section 85 of the Finance Act, 1994. I find that the appellant had together with the subject appeal not submitted the requisite challan evidencing deposition of mandatory pre-deposit and so vide letters bearing even C. Nos. 180 dated 29.05.2023, 364 dated 03.07.2023, 442 dated 18.07 2023 and 725 dated 26.07.2023 they were inter alia requested to submit the same. Further, during the course of personal hearing held on 10.08.2023 the appellant undertook to submit the requisite challan bearing CIN and date along with their additional written submissions within 15 days. The appellant submitted their additional written submissions on 25.08.2023 but did not submit the said Service Tax Appeal No.70490 of 2024 6 requisite challan evidencing deposition of mandatory pre- deposit. However, in their additional submissions the appellant has reiteratedly submitted that in the first round of appeal the appellate authority had accepted their contention of payment of a part of outstanding service tax liability vide CENVAT Credit Account and it stands validated for the subject appeal too. I find that in the earlier round of appeal, the then appellate authority had in his Order-in-Appeal No. GZB- EXCUS-000-APP-94 21-22 dated 23.12.2021 had conclusively held that in the earlier round of adjudication the department had failed to provide opportunity to the appellant to represent their case and thereby had remanded the case to the original authority with respect to all the facts of the appeal then filed by the appellant including their contention that against the subject demand they had already deposited Rs. 71,70,734/- through CENVAT Credit Account and Rs 4,13,909/- vide GAR- 7 challan. Thus the circumstances during the first round appeal were that then the order had been passed in defiance of the principles of natural justice vis-à-vis the claim of the appellant that the aforesaid amount of tax had already been paid by them. However, in the impugned Order dated 20.06.2022, so passed in tandem with the principles of natural justice and after examining all the contentions of the appellant, the adjudicating authority has confirmed the demand of Rs 1,62,85,271/-, along with interest and equal penalty, and has appropriated only an amount of Rs 4,13,909/-, so already deposited by the appellant, against the said confirmed demand. In filing of the subject appeal, the requisite amount of mandatory pre-deposit comes to Rs. 12,21,395/- and after taking into account the amount appropriated in the impugned order i e. Rs.4,13,909/-, the appellant was required to submit a Challan for Rs.8,07,48/- [Rs 12,21,395/- minus Rs 4,13,909/-] so as to fulfil the said essential condition of mandatory pre-deposit. Thus, I find that the subject appeal is deficient in terms of the mandatory pre-
Service Tax Appeal No.70490 of 2024 7 deposit. In the matter, reliance is placed upon the pronouncements made in the following cases:
(i) Suraj Steel Rolling Mills Vs. Union of India [2000 (115) E.L.T. 280 (Guj.)]: Held: Kar Vivad Samadhan Scheme - Pending dispute - Appeals filed by petitioners dismissed by Commissioner (Appeals) for non-compliance of the condition of pre-deposit of duty and penalty-On further appeal. Tribunal was given to understand that the amounts had been pre-deposited and thereupon Tribunal remanded the matter to Commissioner (Appeals) for hearing the petitioner on merits subject to their showing proof of pre-deposit to the said Commissioner - That proof having not been shown, mandatory condition of pre-deposit pending appeal not complied with.
(ii) Venkateshwan Strips Pvt. Ltd. Vs. CCE, Raipur [2004 (171) E.L.T. 323 (Tri. - Del.)]: Held: Appeal Dismissal of Financial arrangement of appellants with Revenue authorities viz. furnishing of security of Rs. 9 lakhs and executing bond of Rs.
38,52,908/- of no consequence as far as compliance with Tribunal's pre-deposit direction is concerned-Appeal dismissed for non-compliance of statutory requirement of Section 35F of Central Excise Act, 1944 in absence of any proof of pre- deposit.
(iii) Kantilal Bhaguji Mohite Vs. CCE&ST, Pune-III [2020 (371) E.L.T. 829 (Bom.)): Held: Appeal to Appellate Tribunal not to be entertained when mandatory pre-deposit condition not complied with-Contention that Tribunal not empowered to dismiss appeal sumply because of assessee's failure to make mandatory pre-deposit and has to dispose it of on merits, not acceptable Section 358 of Central Excise Act, 1944. (paras 2, 3] Pre Service Tax Appeal No.70490 of 2024 8 deposit condition which is mandatory in nature connot be waived, relaxed or diluted.in writ jurisdiction-Article 226 of Constitution of India and Section 35F of Central Excite 461. 1944 (para
6)
(iv) Diamond Entertainment Techno. P. Ltd. Vs. Commissioner of CGST, Dehradun [2019 (368) E.LT. 579 (Del.)]: Held: Appeal before CESTAT- Maintainability of- Appeal filed after 6-8-2014 without compliance with mandatory requirement of pre deposit of 7.596 under amended provisions of Section 35F of Central Excise Ast. 1944- HELD:
Issue no longer res integra, as conclusively decided in Anjani Technoplast Ltd (2015 (326) Ε.Ι.Τ. 472 (Del)) and judgment in Anjani Technoplast (supra) stood mergerl with dismissal of Civil Appeal by Supreme Court [2017 (348) ELT. A132 (SC)] Reading of said Section 35F ibid, reveals, by usage of peremptory words "shall not"
therein, that there is absolute bar on CESTAT for entertaining any appeal, unless assessee deposits 7.5% of duty confirmed against it by authority below Allowing CESTAT to entertain appeal, preferred by assessee after said date, therefore, to amount to allowing CESTAT to act in violation, not only of main body of Section 35F ibid but also of second proviso thereto, and would reduce command of legislature to dead letter - Prayer of petitioner for being permitted to prosecute appeal before CESTAT without complying with condition of mandatory pre-deposit, cannot be granted No substance in writ petition-Article 226 of Constitution of India
(v) Ankit Mehta Vs. Commissioner of CGST, Indore [2019 (368) E.L.T. 57 (Μ.Ρ.)]: Held:
Stay/Dispensation of pre-deposit-Mandatory pre-
Service Tax Appeal No.70490 of 2024 9 deposit-Waiver of-Assessee failed to deposit mandatory pre-deposit citing financial hardships -
No provision under Customs Act, 1962 empowering Tribunal or Commissioner (Appeals) to waive or reducs, pre-deposit-Assessee liable to deposit mandatory amount of 7.5% of demand- Section 129E of Customs Act, 1962 [para 13)
(vi) Nimbus Communications Limited Vs. Commissioner of S. T., Mumbai-IV [2016 (44) S.T.R. 578 (Bom.)): Held: Stay/Despensation of pre-deposit-Mandatory pre-deposit wader amended Section 35F of Central Excise Act, 1944 w.e. f. 6-8-2014-Second proviso to Section 35F ibal clearly indientes that the requirement of mandatory pre-deposit shall not apply to say applications and appeals which were pending prior to 6-8-2014- Amensted Section 35F that required to be complied with when appeal filed after 6-8-
2014 even. (Eshow cause notice issued prior to such amendment-Appeal not maintainable for fathire to deposit makanan amount. [2015 (39) STR. 177 (All). 2016 (43) STR. 25 (Mad) relied on) (paras 21, 22, 23, 24] Pre-deposit Section 35F of Central Excise Act, 1944 as amended on 6- 8-2014-Constitutionality of Mandatory requirement of pre deposit of 7.596 is a reasonable condition and in no way affects vested right of appeal- Amended Section 35SF ibhd merely ensures that interests of Revenue are secured and so not unconstincional.
(vii) Sree Annapoorna Hospitality Services P. Ltd. Vs. C.C., C.E. & S.T., Coimbatore [2015 (39) S.T.R. 804 (Mad)): Held: Stay Dispensation of pre- deposit Mandatory pre-deposit of 7.5% or 10% not reducible by High Court-Grant of 7.5% of demand- In absence of violation of principles of Service Tax Appeal No.70490 of 2024 10 natural justice and procedures assessee is bound to make this deposit for appeal Lis a mandatory deposit which cannot be reduced by High Court- Section 35F of Central Excise Act, 1944 as applicable to Service Tax vide Section 83 of Finance Act, 1994 (para 5)
(viii) Chandra Sekhar Jha Vs. Union of India [2022 (380) E.L.T. 130 (S.C.)]: Held: Customs: In substinated provision wef 6-8-2014, while quantum of mandatory pre- deposit to be paid for filing appeal was scaled down from 100% to much lower percentage (7.5% or 10% as case may be with a maximum of 10 Crore) of disputed amount but discretion earlier available with appellate authority to dispense with such pre-deposit, was withdrawn any appeal or stay application filed after 6-8-2014 governed by substituted provisions of Section 129E of Customs Act. 1962, earlier provision would be applicable only to appeals/stay applications pending with appellate authority on aforesaid date - Interpretation of Low Substitution of a statutory provision results in repeal of earlier provision and its replacement by new provision."
4.3 Appellant have while filing this appeal made the mandatory pre-deposit as required under Section 86 of the Finance Act, read with Section 35F of the Central Excise Act and the appeal has been taken up for consideration. The detail of deposit of 10% as pre-deposit is reproduced below:
S No Challan No Date Amount
1 2402612032 01.02.2024 405000.00
2 2308575815 23.08.2023 810000.00
3 00065 27.09.2017 126641.00
4 02926 06.06.2017 110912.00
5 02674 06.05.2017 86766.00
6 02140 06.07.2017 89590.00
Service Tax Appeal No.70490 of 2024
11
Total 1628909.00
4.4 As the basic ground for not admitting the appeal as per the impugned order is for non-compliance with the provisions of Section 35F of the Act, which have now been complied with. We are of the view that the matter should be remanded back to the Appellate Authority for re consideration and decision on merits in the case.
5.1 Appeal is allowed by way of remand to Commissioner (Appeals) for decision on merits.
5.2 We want to make it clear that appellant shall not withdraw any part of the pre-deposited amount or make a claim for any refund of this amount till the disposal of the appeal by the Commissioner (Appeal) in remand proceedings.
(Operative part of the order pronounced in open court) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp