TMI Blog2013 (12) TMI 1473X X X X Extracts X X X X X X X X Extracts X X X X ..... ), was conscious of his duty to consider the prima facie case and accordingly recorded a finding that the service rendered was covered under the definition of business auxiliary service. The Commissioner (Appeals), however, did not consider whether the purported demand was barred by limitation. Commissioner (Appeals) has cursorily considered the merits of the case. The learned Tribunal has not at all considered the question of limitation. Admittedly, the demand was not raised within one year but almost after five years by invoking the extended period of limitation. The justification of such invocation has not at all been considered. - The Commissioner (Appeals) has not at all considered whether there was any fraud, misrepresentation or suppression with intent to defraud revenue to justify the invocation of the extended period of limitation. - Moreover, after the writ petition was filed the appeal has been dismissed on 9th April, 2012 without any further notice to the petitioner and without opportunity to the petitioner to make pre-deposit - The impugned order cannot be sustained and the same is set aside and quashed - Decided in favour of assessee. - W.P. No. 256 of 2012 - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by the petitioner nor directly procured by the cement manufacturing companies. According to the petitioner, the petitioner has been providing the same service of liaisoning and monitoring the movement of coal on behalf of its clients since the Financial Year 1999-2000 and had even obtained Service Tax registration under the head Clearing and forwarding agent service under Section 65(105)(j) of the Finance Act, 1994. According to the petitioner, after the petitioner realized that no Service Tax was payable for the services rendered by the petitioner, the petitioner applied for surrender of Registration Certification vide a letter dated 29th May, 2000. 6. By an Order No. CE-7/110/CFA/ST/CAL-I/99/388, dated 8th February, 2001, the Superintendent of Central Excise, Service Tax Cell, Kolkata-1, rejected the application of the petitioner for surrender of Service Tax Registration, on the ground that the service provided by the petitioner was liable to Service Tax under the head Clearing and Forwarding Agent . 7. The petitioner filed an appeal before the Commissioner (Appeals) on 20th April, 2001. By an order dated 5th November, 2002, the Commissioner (Appeals) upheld the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was thus defined to mean, any service in relation to - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production of goods on behalf of the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clause (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but docs not include any information technology service and any activity that amounts to manufacture within the meaning of clause (f) of section 2 of the Central Excise Act, 1944 (1 of 1944). 14. It is contended that the petitioner did not fall within the purview of the definition of Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made, requiring him to show cause why he should not pay the amount specified in the notice : PROVIDED that where any Service Tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of Service Tax, by the person chargeable with the Service Tax or his agent, the provisions of this sub-section shall have effect, as if, for the words one year , the words five years had been substituted. Explanation : Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. 19. The show-cause notice was issued by invoking the extended period of limitation as prescribed under the proviso to Section 73(1) of the 1994 Act. The petitioner replied to the show-cause notice and also availed the opportunity of personal hearing given to the petitioner. 20. By an Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing. 24. The said Section provides for waiver of pre-deposit in case of extreme hardship. Just as financial inability to make pre-deposit can lead to hardship, payment of an amount which is not payable, under compulsion, also leads to hardship. It is well settled by judicial precedents both of this Court and of the Supreme Court that when a strong prima facie case is made out pre-deposit must be waived. Even where the assessee has an arguable case, pre-deposit should be waived. However, in such a case the concerned Appellate Authority would have to secure the interest of the revenue in the manner he deems appropriate. 25. It is well-settled that in considering the question of waiver of pre-deposit, the Appellate Authority is bound to consider the prima facie merits of the case. Prima facie case does not mean gilt edged ease as held by this Court in Ruby Rubber Industries v. Commissioner of Central Excise, Calcutta-II reported in 1998 (104) E.L.T. 330 (Cal.). The Appellate Authority is to examine, whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... devoid of reasons for deposit of that amount, was in flagrant violation of principles of natural justice. 32. In CEAT Ltd. v. Union of India reported in 2010 (250) E.L.T. 200 (Bom.) a Division Bench of Bombay High Court observed : 12. 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 and Ors. : MANU/SC/0199/1994 : [1993] 2 SCR 715 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 caused when the hardship is not warranted by the circumstances. 13. For a hardship to be undue it must be shown that the particular burden to have 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of limitation is not invocable unless there is some positive act other than mere inaction or failure on the part of the manufacturer. There must be conscious or deliberate withholding of information by the assessee to invoke the larger period of limitation. In the instant case, there is not a whisper of the information that was deliberately withheld by the petitioner to avoid its liability to pay Service Tax. 39. In Aban Loyd Chiles Offshore Limited v. Commissioner of Customs, Maharashtra reported in 2006 (200) E.L.T. 370 (S.C.), cited by Mr. J.P. Khaitan, the Supreme Court held that when facts were within the knowledge of the department, invocation of extended period of limitation was not sustainable. 40. In Indu Nissan Oxo Chemicals Industries Limited v. Union of India and Ors. reported in 2007 (13) SCC 487 = 2008 (221) E.L.T. 7 (S.C.) the Supreme Court held : - 12. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account the total liability of the appellant, in the order under appeal, which is ₹ 48,47,791/- as Service Tax, ₹ 48,47,791/- as penalty under Section 78, ₹ 5,000/- as penalty under Section 77(2), penalty under Section 77(1)(a) and interest. 45. First of all, the order does not disclose the reason for directing deposit of ₹ 30 lakhs only. Moreover, that amount as stated above has been determined on the assumption that the petitioner was liable to pay penalty as well. The Commissioner (Appeals) has not considered the question of justification of imposition of penalty in the facts and circumstances of the instant case. 46. Moreover, after the writ petition was filed the appeal has been dismissed on 9th April, 2012 without any further notice to the petitioner and without opportunity to the petitioner to make pre-deposit. 47. The impugned order cannot be sustained and the same is set aside and quashed. The order of dismissal of the appeal on the ground of failure to make pre-deposit is also set aside. The Commissioner shall consider the stay application afresh in the light of the observations made above. The Commissioner (Appeals) may, if he so chooses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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