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TMI Blog2011 (1) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... rs i.e., 2003-04 to 2006-07, the respondent allegedly charged monetary consideration from students to the tune of Rs. 823,20,45,019/-. The respondent's activity of commercial training or coaching service attracts levy of service tax under Sections 65(26) and (27) read with sub-section (105)(zzc) of the Finance Act, 1994. After coming into force of the amendment to Section 65(105) of the Finance Act, in spite of advice by the Revenue, the respondent did not obtain registration. By communication dated 31-7-2003, they informed the Range Officer that, there was no legal obligation to obtain registration. In March, 2005, the corporate office of the respondent was inspected and the records were seized. There were proceedings in this Court under Article 226 of the Constitution of India as well as before the Supreme Court under Article 136 of the Constitution. It may not be necessary to advert to those proceedings, in this order. Whatever be the reason, the respondent belatedly obtained Centralized Service Tax registration on 21-6-2006 in Guntur Excise Commissionerate as provider of "commercial training or coaching service". They also paid Rs. 9,98,921/- towards service tax liability for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 73 of the Finance Act. 6. The Senior Standing Counsel for Revenue submits that, the learned CESTAT was in error in passing the impugned order in a routine manner ignoring Section 35F of the Central Excise Act. He also points out that, in the other appeal filed by the respondent against levy of service tax, the CESTAT had directed deposit of 100% of the tax demanded, whereas in the present case waiver of pre-deposit and stay of recovery was granted without application of mind. He also submits that the CESTAT did not consider the circular dated 28-1-2009 issued by the Central Board of Excise & Customs with regard to retrospectivity. Per contra., the Counsel for the respondent reiterated their position as pleaded in their counter summarized herein above. 7. The Finance Act, 1994 confers power on the Commissioner to serve notice on the person chargeable with tax, which has not been paid, requiring him to show cause why he should not pay the amounts specified in the notice. Section 73(1) of the Finance Act bars any such proceedings beyond a period of one year unless the non-levy or non-payment of tax is by reason of fraud, collusion, willful mis-statement, suppression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any order to dispense with pre-deposit has necessarily to be subject to certain conditions which are to be imposed to safeguard the interests of revenue. This provision and other similar provisions in fiscal laws have been considered in a number of cases. The Apex Court ruled that the power to dispense with the condition of pre-deposit for entertaining an appeal cannot be exercised in a routine manner, and that it should be exercised keeping in view the interests of revenue. 9. In Asst. Collector, Central Excise v. Dunlop India Ltd., 1985 (19) E.L.T. 22 (S.C.) = (1985) 1 SCC 260 = AIR 1985 SC 330 the Government of India issued a notification under Rule 8(1) of the Central Excise Rules, 1944 exempting tyres, falling under Item 10 of the First Schedule to the Central Excise Act, from certain percentage of excise duty to the extent that the manufacturers had not availed such exemption under the earlier notifications. The department, however, denied exemption to Dunlop who approached the Calcutta High Court. A learned Single Judge passed an interim order allowing the benefit of the exemption to the tune of about Rs. 3.00 crores on condition of assessee furnishing a bank guarante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interests of the Revenue have to be kept in view. As noted above there are two important expressions in Section 35F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka, (1993) 3 SCC 467 : AIR 1994 SC 923, that under Indian conditions expression "undue hardship" is normally related to economic hardship. "Undue" which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances. For a hardship to be "undue" it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. The word "undue" adds something more than just hardship. It means a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary to safeguard the interests of revenue, while granting an order to dispense with pre-deposit for filing an appeal. 12. Indu Nissan Oxo Chemicals Industries Ltd. v. Union of India, (2008) 221 E.L.T. 7 (S.C.) = (2007) 13 SCC 487 is a case under Section 129E of the Customs Act. Following Dunlop India Ltd., the Supreme Court reiterated that, "petitions for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand." 13. In Monotosh Saha v. Enforcement Directorate, 2008 (229) E.L.T. 492 (S.C.) = (2008) 12 SCC 359 = 2010 (18) S.T.R. 81 (S.C.), Section 19 of the Foreign Exchange Management Act, 1999, which is in similar terms as that of Section 35F of the Central Excise Act, was considered. Following Benara Valves the Supreme Court upheld the order of the Tribunal which directed deposit of 60% of the penalty amount for the purpose of entertaining the appeal. 14. From the judicial decisions analysed as above, the following principles would emerge which have to be kept in mind while considering the applications for stay or for dispensing with the requirement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the definition of "Commercial Training and Coaching Centre" was introduced. We find that the decisions cited by the learned counsel are in favour of the assessee. It is also fact that the Govt. of India has brought in retrospective amendment to the definition of "Commercial Coaching and Training Centre" which could include the activity of the appellant and liability to service tax arises. Retrospective amendment made by the Act is silent on the question of limitation. We are in agreement with the learned counsel that the entire amount of service tax is hit by limitation. In view of this, application for waiver of pre-deposit of the amount involved is allowed and recovery thereof stayed only on the ground of limitation till the disposal of the appeal." 16. In our considered opinion, the order of the CESTAT is not in accordance with the law laid down by the Supreme Court. The learned CESTAT failed to focus its consideration on prima facie case, balance of convenience and irreparable loss. It did not consider the aspect of undue hardship which must exist for exercising power under Section 35F of the Central Excise Act. Even assuming that there is hardship, the Tribunal ough ..... X X X X Extracts X X X X X X X X Extracts X X X X
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