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Judgment
The assessee has preferred this appeal against order dated 18th February, 2016 made by the Customs, Excise and Service Tax Appellate Tribunal, Kolkata Eastern Zonal Bench(CESTAT) in MA 75282/14 in Service Tax Appeal no.303 of 2011 by which the miscellaneous application for restoration of the said appeal was dismissed.
The facts in brief are that the assessee received mobilization advance towards civil and road construction. The Revenue demanded service tax on such mobilization advance being the sum of Rs.1,08,12,868/-. The appellant contended that part of the mobilization advance received was towards construction of road which is not exigible to service tax. The appellant computed its liability to pay service tax at Rs.85 lakhs and deposited the same. By order in original dated 31st March, 2011 it was adjudicated that the service rendered by the assessee should be treated as a single service based on the essential character or the dominant element of the transaction as per principal of classification laid down under section 65A of the Finance Act, 1994, repelling the contention of the appellant that service of construction of road work was not taxable as per definition of Commercial or Industrial Construction Services falling under the purview of section 65(25b) read with section 65(105)(zzq)of the said Act. By the said order, demand of the said sum of Rs.1,08,12,868/- was confirmed, of which Rs.85 lakhs already paid appropriated against the Government dues. Interest for delayed payment of the said sum of Rs.85 lakhs was also directed against the appellant, penalty of the sum of Rs.1,08,12,868/- imposed and further penalty of Rs.5000/- imposed under section 77 of the said Act.
Against the said order the appellant had sought to prefer the said appeal before the CESTAT along with an application seeking waiver of pre- deposit of service tax of Rs.23.12 lakhs and penalty of Rs.1.08 crores.
The Tribunal by its decision dated 6/8th January, 2014 directed the appellant to deposit the outstanding service tax amount of Rs.23,12,868/- within a period of eight weeks therefrom as pre-deposit and failure to deposit would result in dismissal of appeal without further notice. By the order impugned the misc application seeking restoration of dismissal of the said appeal, by operation of the direction in the said decision dated 6/8th January, 2014, was dismissed due to non-compliance.
Mr. S.P. Majumder, learned advocate appeared on behalf of the appellant and submitted that the present pre-deposit requirement is 7.5% of the demand. The demand could not be said to be more than Rs.23,12,868/- and, after the amendment, 7.5% of that could only be insisted upon as pre- deposit for the purposes of hearing of the appeal. He submitted, the direction made by the said decision dated 6/8th January, 2014 for deposit of the balance demand was illegal inasmuch as the entire pre-deopsit ought to have been waived. However, the appellant was ready and willing to put in the deposit of 7.5% of Rs.23,12,868/- as pre-deposit for the purposes of hearing of the appeal. Mr. Banerjee, learned advocate appeared on behalf of the Revenue and did not dispute that the sum of Rs.85 lakhs of the demand had been paid and appropriated as Government dues. He also did not oppose the submission regarding the appellant''s willingness to pre- deposit 7.5% of Rs.23,12,868/- for a direction that the appeal be heard.
In view of the above, we set aside the order impugned with direction upon the appellant to deposit 7.5% of Rs.23,12,868/- being the sum of Rs.1,73,465/- within two weeks from date and thereafter the appeal be heard by the Tribunal on merits. In default of such deposit the impugned order will stand confirmed.
The appeal is disposed of as above.