Validity of Pre-Deposit in Service Tax Appeal: CESTAT Remands Matter to Commissioner (Appeals) [Read Order]

The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) remanded a service tax appeal to the Commissioner (Appeals) for fresh adjudication, directing verification of the pre-deposit validity.

Swami Nana Exchange Pvt Ltd, appellant-assessee, engaged in money changing, was issued a show cause notice on October 23, 2013, for short payment of ₹12,21,868 in service tax under Section 73(1) of the Finance Act, 1994. The notice also sought interest under Section 75 and penalties under Sections 76, 77, and 78. The Deputy Commissioner adjudicated the matter through an Order-In-Original dated November 27, 2015.

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Aggrieved by the Deputy Commissioner's order, the assessee filed an appeal with the Commissioner (Appeals), claiming to have deposited 7.5% of the duty demand through Challan No. 33719 dated February 5, 2016. On May 16, 2016, the Commissioner (Appeals) remanded the matter for re-adjudication. The assessee then filed another appeal against this order.

In its order dated June 6, 2017, the Commissioner (Appeals) found that the assessee had not made the required 7.5% pre-deposit under Section 35F of the Central Excise Act, 1944. It also noted that the assessee misled the office by resubmitting an old GAR-7 Payment Acknowledgement from February 5, 2016, used in a previous appeal. As a result, the Commissioner dismissed the appeal as invalid due to non-payment of the pre-deposit.

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The assessee counsel argued that the Commissioner (Appeals) failed to consider that the 7.5% pre-deposit made through Challan No. 33719 dated February 5, 2016, was still with the department and had not been refunded. The counsel claimed that this pre-deposit, submitted with the first appeal, was valid.

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After de novo adjudication, the authority reaffirmed all the charges from the original show cause notice. The advocate argued that the Commissioner (Appeals) should have considered the existing pre-deposit when admitting the appeal.

The two member bench comprising Dr.Ajaya Krishna Vishvesha(Judicial Member) and C.L.Mahar (Technical Member) remanded the matter to the Commissioner (Appeals) to verify Challan No. 33719 dated February 5, 2016, as the mandatory pre-deposit and decide the case afresh on its merits.

To Read the full text of the Order CLICK HERE

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