Kulithalai Municipality vs Commissioner Of GST And Central Excise

The appellant is aggrieved by the order passed by Commissioner (Appeals) who dismissed the appeal for noncompliance of predeposit under

Section 35F of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994.

On behalf of the appellant, Ld. Consultant Shri V. Alagappan appeared and argued the matter. He adverted to the discussions in para-4 of the

impugned order and submitted that after filing the appeal before Commissioner (Appeals), appellant opted to avail the scheme under Sabka Vishwas

(Legacy Dispute Resolution) Scheme, 2019. They applied for settlement under the scheme and paid an amount of Rs.5,74,103/-. However, the

payment could be made only on 21.07.2020 and the last date for payment under the scheme was 30.06.2020. The appellant, therefore, could not avail

the benefit of the said scheme. Though the Commissioner (Appeals) noted in the impugned order that appellant has made such amount towards the

confirmation of service tax, he rejected the appeal holding that the mandatory predeposit has not been complied with. It is argued by the Ld.

Consultant that amount deposited by the appellant towards the service tax should be considered as payment towards mandatory predeposit and the

appeal ought to have been considered on merits. It is further submitted by him that when the appellant has made deposit of Rs.5,74,103/- towards the

demand under the order appealed against by them, it is not necessary to demand further predeposit separately from them. He prayed that appeal may

be allowed.

Ld. A.R Ms. Sridevi Taritla supported the findings in the impugned order.

After going through the discussions made by the Commissioner (Appeals) in paras 4,5 & 6 of the impugned order, it is seen that he has taken into

notice that appellant has paid an amount of Rs.5,74,103/- towards the tax demand. The said amount has not been considered by him to be in

compliance of the mandatory predeposit for filing the appeal. He has taken a view that said amount having been paid by them after the application

under the Sabka Vishwas Scheme, the same cannot be considered as mandatory predeposit. The appellant has not been given the benefit of the

scheme as there was delay in payment of the service tax under the said scheme. Since the amount paid by the appellant is towards the service tax

confirmed under the Order-in-Original dt. 24.06.2019, the said payment ought to have been considered towards compliance of predeposit having been

made before the appeal is taken up for hearing. The Commissioner (Appeals) has issued reminders to the appellant to make predeposit by online on

several dates even though they have made deposit of more than Rs.5 lakhs which would suffice 7.5% of total tax demand as required under Section

35F of the Central Excise Act ibid. Needless to say that even if debit is made in Cenvat account, the same can be considered as sufficient compliance

of predeposit. This being so, the Commissioner (Appeals) should not have insisted on making further predeposit over and above Rs.5,74,103/- already

paid by the appellant. From the discussions, I hold that the view taken by the Commissioner (Appeals) that the appellant has not complied with

mandatory predeposit cannot sustain. The impugned order is set aside. The matter is remanded to Commissioner (Appeals) with a direction to decide

the case on merits without insisting on any further predeposit. The appeal is allowed by way of remand in the above terms.

(Dictated and Pronounced in open Court)