TMI Blog2016 (7) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... 35-F of the Central Excise Act. Therefore, the reasoning recorded by the Tribunal to decline waiver of predeposit is in accordance with law for the reason that the assessee himself disclosed the claim for depreciation to a tune of ₹ 6.80 crores, Sundry Debtors to the tune of ₹ 8.58 crores and loans and advances of ₹ 11.35 crores. Even otherwise, the assessee is a partnership firm, the partners are liable to pay statutory dues to the Government. Therefore, the order of the Tribunal does not indicate that the assessee can sell away the assets and make predeposit. On an overall consideration of the material on record, the assessee possessed sufficient means to comply with the requirement of Section 35-F of the Central Excise Act and that the assessee would not be put to financial hardship for compliance of the same. - No relief - Writ Petition shall stand dismissed - Decided against the petitioner. - C.E.A.NO. 4 OF 2016 - - - Dated:- 16-6-2016 - SRI RAMESH RANGANATHAN AND SRI M.SATYANARAYANA MURTHY, JJ. FOR THE PETITIONER : SIVA KARTIKEYA ORDER: (Per Hon ble Sri Justice M.Satyanarayana Murthy) The assessee filed this appeal under Section 35G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red C.E.A.No.10 of 2015, the same was allowed by this Court on 10.02.2015 directing the Tribunal to decide the application for waiver of pre-deposit, afresh. In pursuance of the direction issued by this Court, the Tribunal passed the impugned order on 05.08.2015 directing the assessee to deposit further sum of ₹ 4.00 crores within 12 months from the date of passing the order. The Tribunal did not consider the income-tax returns and other material produced before it in proper perspective and passed the impugned order by ignoring the material on record. The order is challenged on various grounds mainly contending that the Tribunal did not consider the financial hardship, which is a primary requirement to waive the pre-deposit. Though sufficient material was produced before the Tribunal, the Tribunal erroneously concluded that the current assets and the provision covering the current liabilities are more than the required pre-deposit and declined to waive pre-deposit of service tax. At the stage of admission, the matter was heard. During hearing, learned counsel for the assessee Sri A.V.A.Siva Kartikeya would contend that the assessee cannot sell the property for pre-depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 04.00 crores in compliance of Section 35-F of the Central Excise Act. Therefore, to claim waiver of pre-deposit, it is for the assessee to establish that the assessee would be put to undue hardship, if predeposit is not waived. Section 35-F of the Central Excise Act and Section 129-E of the Customs Act makes pre-deposit mandatory in order to avail the remedy of an appeal before the CESTAT. The first proviso, an exception to the general rule, conferred power on the CESTAT, to dispense with such deposit subject to such conditions as may be imposed so as to safeguard the interests of revenue if the demand would cause undue hardship. Thus, it is evident from the proviso to Section 35-F of the Central Excise Act and Section 129-E of the Customs Act, it is the duty of the assessee to establish that if pre-deposit is not waived, the assessee would be put to undue hardship. While granting such waiver of pre-deposit, the authorities concerned must keep in mind, the interest of revenue also ( The Commissioner of Central Excise, Guntur Commisionerate, Guntur v. M/s. Sri Chaitanya Educational Committee, Poranki, Vijayawada, represented by its Managing Director (Judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d hardship means - Privation, suffering (hardship resulting from the regulation). Ordeal, adversity, oppression, woe, grief, unhappiness, agony, misery, difficulty, travail, misfortune, tribulation, burden, encumbrance, trial, torment, stress, cross, peril, blow, severity, desolation, harm, damage, casualty, deprivation, grievance, bane, destitution, suffering, pain as per West s Legal Thesaurus/Dictionary. If both the words undue and hardship are read conjointly, it is nothing but more than necessary suffering or exorbitant or difficulty. This Court, while dealing with the similar issue in batch of Appeals C.E.A.No.45 of 2015 and batch (B.Hima Bindu v. Commissioner of Customs) held that while considering the application, seeking waiver of pre-deposit, these twin requirements should be kept in view. Use of the word undue would mean something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant. Undue means something which is not merited by the conduct of the claimant, or is disproportionate to it. For a hardship to be undue, it must be shown that the burden to observe or to perform is out of proportion to the nature o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e statutory guidance while exercising general powers or expressly conferred incidental powers. In the present facts before us, the main grievance of the assessee is that the assessee is running in loss for the last many years prior to the demand and on the date of demand for payment of duty or service tax. To substantiate the said contention, the assessee produced profit loss account statements and Balance sheets. As seen from the Balance Sheets, the assessee is running in loss. Even for the Financial Years 2008-2009, 2009-2010 and 2010-2011, the assessee has incurred loss of ₹ 4,56,94,147/-, ₹ 2,39,58,099/- and ₹ 29,94,802/- respectively. Besides that, in Profit and Loss account, the assessee claimed depreciation to an extent of ₹ 6.80 crores. The Profit and Loss account discloses that Sundry Debtors are to the tune ₹ 8.58 crores, and Loan and Advances to the tune of ₹ 11.35 crores. The depreciation claimed to the extent of ₹ 6.80 crores is only for accounting purpose and there will not be any outflow of money for claiming depreciation. That apart Sundry Debtors are more than ₹ 8.50 crores besides loans and advances to a tune of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is from the year 2007-2008 to 2010-2011. According to Section 11-A of the pre-amended Central Excise Act, the limitation to issue show cause notice is within one year from the date of short levy or short payment or erroneous refund or when erroneous refund is made, but, a proviso annexed to it permits the department to issue show cause notice within five years from the date of such short levy, short payment of erroneous refund due to fraud, collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of the Act or the rules made thereunder. Thus, the limitation to issue notice is five years. In case, the assessee gives misstatement or suppresses the turnover without disclosing the actual services rendered by it for payment of service tax. In the present case, a show-cause notice dated 12.03.2012 was issued explaining as to how the assessee suppressed the amount without declaring the income from various sources. In paragraph 19 of the show cause notice, it is made clear that the assessee has suppressed the fact of provision of taxable service in the Service Tax-3 return and also contravened the provisions of Finance Act and Service Tax Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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