We Help vs Commissioner of Central Excise, Mangalore

N. Kumar, J.

Jeevan J. Neeralgi, learned counsel is directed to take notice for the respondent. The appeal is filed challenging the order passed by the Tribunal rejecting the application filed by the appellant for waiver of the pre-deposit in filing the appeal under Section 35F of the Central Excise Act, 1944.

The appellant was supplying manpower to MESCOM and they were claiming 5% as the service charges. The dispute was, whether the amount paid by the MESCOM is to be treated as service charges or only that 596 claimed by the appellant is to be treated as service charges. The authorities were of the view that, he has to pay service tax to the entire amount as it is not paid nearly for five years. Aggrieved by the said order, the appellant preferred an appeal.

In the appeal, an application was filed for waiver of the pre-deposit amount. The said application came to be dismissed on the ground that the appellant has not made out a prima facie case in his favour and therefore the entire amount of tax should be deposited within eight weeks. Aggrieved by the said order, the present appeal is filed.

We have heard the learned counsel appearing for both the parties.

The learned counsel points out whatever service charges were demanded by them have been paid. They have not collected any service tax from the MESCOM. The assessee is a proprietary concern. After the death of the father, son is running the said concern. In fact, at present they have no business and facing financial difficulties. Apart from that Section 35F is now amended. In the terms of the new Section which is introduced, by way of substitution seven and half percent of the demand is to be paid. Under these circumstances, the order passed by the Tribunal cannot be sustained.

We find some substance in the said submission. Though the substituted Section appears to be prospective in nature certainly the intention behind it cannot be ignored. The original proprietor is dead. His son is levied with these taxes. He is not carrying on any business. Under these circumstances justice of the case would be met by depositing 50% instead of the entire amount as directed by the Tribunal. Hence, we pass the following:

ORDER

Appeal is allowed. Impugned order is modified. Appellant is directed to deposit 50% of the demand within eight weeks from today. The Tribunal shall take up the matter and decide the case on merits and in accordance with law.