Kadam Advertising and Marketing Pvt. Ltd. vs CESTAT

Heard Sri D.M. Shukla, learned Counsel for the appellant and Sri Rajesh Singh Chauhan, learned Senior Standing Counsel of Central Board of Excise and Customs. The appellant is engaged in the business of printing & fabrication of readymade advertisement material and on imposition of Service Tax on the goods by the Assessing Authority, preferred an appeal, bearing No. ST/117/2012, along with an application for stay praying therein waiver of pre-deposit for entertaining the appeal as provided u/s 30(g) of the Service Tax Act, 1994, before the Customs, Excise & Service Tax Appellate Tribunal, Principal Bench, New Delhi [hereinafter referred to as the "Tribunal"]. The Tribunal, after going through the records and after hearing the parties, passed the impugned order dated 22-10-2012, whereby the Tribunal directed to deposit Rs. 7 Lakhs as pre-deposit within a period of eight weeks and further directed to waive off the balance of dues arising from the impugned order dated 15-9-2011, subject to pre-deposit of balance by the appellant and stayed on collection of such dues during the pendency of the appeal. Feeling aggrieved, the instant appeal has been preferred by the appellant.

Learned counsel for the applicant submits that the Tribunal decided the matter without considering the financial stringency shown in the affidavit in support of the application for interim relief as well as the Bank account of the appellant and directed to make payment of Rs. 7 lakh as pre-deposit during the pendency of the appeal in a most arbitrary and illegal manner and without proper application of mind to the facts of the case. He submits that the power of stay should be judicially exercised and the order should be passed after proper application of sound principles for exercising discretion and the application of stay should be treated casually and the authority should not pass the routine order.

In support of the aforesaid submissions, learned Counsel for the appellant has relied upon the judgment of the Apex Court in the case of Income Tax Officer Vs. M.K. Mohammed Kunhi, , Mehsana District Cooperative Mill Pvt. Ltd. v. Union of India [ 2003 (154) E.L.T. 343 (S.C.)] and Shri Kihota Hollohon Vs. Mr. Zachilhu and others, and this Court''s judgment in the case of Moriroku UT India Pvt. Ltd. Vs. Union of India (UOI) and Others, .

Relying upon the judgment of this Court in the case of Tata Coffee Ltd. v. Commissioner of Trade Tax reported in 2002 UPTC 156, learned Counsel for the appellant submits that while considering the waiver cum stay, the Tribunal ought to have considered the prima facie merit of the case as well as financial condition of the appellant.

While entertaining the appeal, the Tribunal is required to look into the prima facie merit of the case as well as financial condition of the appellant. Further, the Tribunal is required to consider the relevant factor like financial hardship and other relevant facts because the condition of deposit will make the purpose of filing of appeal itself nugatory. Considering the peculiar facts and circumstances of the case, appeal is partly allowed. The order 22-10-2012 passed by the Tribunal is modified to the extent that in case the appellant deposits 10% of the assess amount as pre-deposit for entertaining the appeal within a period of three months from today, the Tribunal shall consider the appeal on merit and decide it, expeditiously, in accordance with law.