Om Sakthi Travels Pvt. Ltd. vs Commissioner of Service Tax, Chennai

R. Sudhakar, J.—The present appeal has been filed by the assessee against the order of the Customs, Excise and Service Tax Appellate Tribunal, Chennai, wherein direction was given to the appellant to pre-deposit the entire amount Service Tax within a time frame for the purpose of hearing the appeal, while the penalties and interest were waived. In this appeal, the following substantial questions of law have been raised:

"1. Whether the order of the Tribunal is right in directing the appellant to deposit an amount of Rs. 2,52,81,707/- is unjustifiable inasmuch as the same was not lawfully made and made by invoking invalid provisions of the Finance Act, 1994?

Whether the order of the Tribunal is justified in ordering pre-deposit overlooking the various grounds made by the appellant justifying the non-maintainability of the demand on merits and under law?

Whether the order of the Tribunal directing a pre-deposit of Rs. 2,52,81,707/- stands vitiated inasmuch as it fails to see that the condition imposed is such which for all intent and purport takes away the appellants vested right of appeal and works as a deterrent or disables and impedes access to a forum viz., CESTAT which is meant for redressal of the grievance of an assessee suffering an adverse order and results in rendering the statutory remedy of appeal illusory?

Whether the order of the Tribunal failed to see that a strong prima facie case has been made out by the appellants inasmuch as the services rendered by the appellant would not be covered by the definition of "rent-a-cab scheme" as given under Section 65(20) of the Finance Act 1994 with effect from 1-6-2007."

The appellant suffered a Service Tax demand on account of service rendered in a Rent-a-Cab scheme and the amounts are Rs. 11,30,500/- (Rupees Eleven Lakhs Thirty Thousand and Five Hundred only) for the period November, 2014 to 31-5-2007 and a further sum of Rs. 2,41,51,207/- (Rupees Two Crores Forty One Lakhs Fifty One Thousand Two-Hundred and Seven only) for the period 1-6-2007 to March, 2009. That order came to be challenged before the Tribunal along with an application for waiver of pre-deposit and the Tribunal, by order, dated 19-7-2012, was pleased to consider the prima facie case of the appellant with the following observations and held that there was no case for waiver of pre-deposit:-

"Service Tax demand of Rs. 11,30,500/- has been confirmed against the applicants for the period November, 2004 to 31-5-2007 on the ground that they have collected the Service Tax from the service recipient but not deposited into the Government''s treasury under rent-a-cab service. For this period, there is a dispute that the relevant taxing entry during the time did not cover the activity of the appellants because they were using vehicles like 50 seater buses for transportation. For the period 1-6-2007 to 31-5-2007, it is fairly clear that the entry covers the services provided. For this period a demand of tax amount of Rs. 2,41,51,207/- is confirmed along with interest and various penalties under the Finance Act, 1994, as Service Tax not paid by the appellant on such services rendered. For the latter period also Revenue submits that the appellants had collected Service Tax but not deposited with the Government.

There is no dispute on the facts that the applicants are providing the above service to their service recipient and they have also received the amount of Service Tax during the period from November, 2004 to 31-5-2007.

In view of these observations, we find that the applicants have failed to make out a case for waiver of predeposit. Accordingly, we direct the applicants to make a pre-deposit of the entire amount of Service Tax confirmed against them within eight weeks and report compliance on 20-9-2012. On such compliance interest and penalties shall remain waived during the pendency of the appeal."

The matter was listed on 1-1-2013 for reporting compliance of the order, dated 19-7-2012 2015 (37) S.T.R. 262 (Tri.-Chennai)]. The Tribunal, taking note of the fact that there was no application filed for extending the period of time and the pre-deposit having not been paid within the time stipulated in the order passed in the interim application, came to conclusion that the reason given by the appellant that writ petition is pending before the High Court and, therefore, the demand should not be enforced was not accepted. The Tribunal, noticing that the High Court did not stay the operation of the order of the Tribunal and there being no application for extension of time, had no other choice except to dismiss the appeal for non-compliance of Section 35F of the Central Excise Act by its Order No. 40001/2013, dated 1-1-2013 2015 (37) S.T.R. 269 (Tri.-Chennai)] and these orders are challenged in these appeals.

Heard the learned counsel appearing for the appellant and the learned standing counsel appearing for the respondent.

The Tribunal has considered the prima facie case and ordered pre-deposit of the entire amount. When the matter was listed for reporting compliance, there was no plea made for extending the time to make pre-deposit, except stating that a writ petition has been filed challenging the conditional order passed by the Tribunal. The Tribunal considering the fact that in the writ petition this Court has not granted any stay of order, dismissed the appeal for noncompliance of the conditional order of pre-deposit. The said order passed by the Tribunal is justified, as this Court in the writ petition has not granted any stay of the conditional order passed by the Tribunal. No extension of time is sought for and the order has not been complied. We find no reason to differ with the said view taken by the Tribunal. We find no substantial question of law for consideration on the above stated facts. Accordingly, we hold that the reasoning given by the Tribunal to pre-deposit is justified and, therefore, calls for no interference. Accordingly, this appeal fails and the same is dismissed. Consequently, connected miscellaneous petition is also dismissed. However, there shall be no order as to costs.