TMI Blog2009 (6) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appellate Tribunal Principal Bench, New Delhi, disposing of the appellant's application for stay/waiver of pre-deposit of the service tax demand and penalty with a direction to deposit a sum of Rs.1crore within 8 weeks and report compliance on 25th of June, 2009. Facts giving rise to the dispute are as under. Appellant was issued a notice dated 10.10.2007 to show cause as to why, (i) Education Cess amounting to Rs.3,58,717/- short/not paid by them and interest accrued thereon, should not be demanded and recovered from them respectively under Section 11A 11AB of the Central Excise Act, 1944 and the amount of Rs.2,54,805/- already paid should not be appropriated and adjusted against the total amount so payable; (ii) Penalty under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 should not be imposed upon them; (iii) CENVAT Credit amounting to Rs.6,21,39,585/- wrongly availed and utilised should not be demanded and recovered from them under Rule 14 of CENVAT Credit Rules, 2004 read with Section 11A of Central Excise Act, 1944; (iv) Interest should not be recovered from them under Rule 14 of CENVAT Credit Rules, 2004 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority is bound to examine the issue and if prima facie, a strong case on merit is established, the condition of pre-deposit ought to be waived. It has further been submitted that financial hardship does not mean as to whether the appellant is in a position to make the payment or not, but the tribunal is under an obligation to examine prima facie case whether the appellant is liable to make any payment at all and if the case on merit is prima facie found to be established, waiver should be permitted. It has further been pointed out that in view of the judgment of the Punjab Haryana High Court in the case of Ambuja Cements Ltd. Vs. Union of India Ors., 2009 TIOL 110 as well as Board Circular No. 97/8/2007-ST dated 23.08.2007 and the decision dated 18.05.2009 of the larger Bench of the Tribunal at Banglore, which still holds the field, the appellant was entitled to avail the CENVAT Credit against onward transportation of goods and, thus, had a very strong prima facie case and order of the Tribunal directing to make a deposit of Rs.1crore, in the circumstances, is totally illegal and unjustified. It has next been submitted that various Benches of tribunal throughout the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2004 and thereby enabling the manufacturer to take credit of the service tax paid on the value of such service or whether 'input service' should be limited only to outward transportation up to the place of removal in terms of inclusive definition as held in Gujrat Ambuja case. By means of a well considered and detail judgment, the larger Bench of the tribunal answered the reference by holding that the services availed by manufacturer for outward transportation of final products from the place of removal should be treated as an 'input service' in terms of Rule 2 (1)(ii) of the CENVAT Credit Rules, 2004 and thereby enabling the manufacturer to take credit of the service tax on the value of such service. Section 35 B of the Act provides for an appeal against the order passed by Commissioner of Central Excise exercising power as adjudicating authority before the Appellate Tribunal. Section 35 F of the Act prescribes condition of pre-deposit of duty demanded and the penalty levied for maintaining the appeal by the assessee. However under proviso, the tribunal has been vested with the powers to dispense with such deposit, on forming an opinion that such deposit may cause undue hardshi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 104) E.L.T. 325 (Del.), has observed as under. "8. Mr. M.L. Bhargava, the learned Counsel for the respondent submitted that the impugned order being a discretionary order is not liable to be interfered with in exercise of writ jurisdiction of this Court. He relied on the decision of the Supreme Court in S.I. Coir Mills Vs. Addl. Collector, Customs , AIR 1976 SC 1527 and Oswal Weaving Factory Vs. State of Punjab, AIR 1966 Punjab 532. Suffice it to observe that while disposing of an application under Section 129 of the Customs Act, 1962 the Tribunal is obliged to adhere to the question of undue hardship. The order of the Tribunal should show if the pleas raised before it, have any merit prima facie or not. If the appellant has such a prima facie strong case as is most likely to exonerate him from payment and still the Tribunal insists on the deposit of the amount it would amount to undue hardship." A Division Bench of this Court in the case of I.T.C. Ltd. Vs. Commissioner (Appeals), Customs Central Excise , [2005 (184) E.L.T. 347 (All.)] held as follows. "While considering the application for stay/waiver of a pre-deposit, as required under the law, the Court must a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999 (108) E.L.T. 621, Calcutta High Court in the case of J.N. Chemical (Pvt.) Ltd. Vs. CEGAT, 1991 (53) E.L.T. 543 (Cal.), Madras High Court in the case of Andhra Civil Construction Company Vs. CEGAT, 1992 (58) E.L.T. 184, Allahabad High Court in the case of Hindustan Ferro Industries Ltd. Vs. CESTAT, New Delhi, 2006 (205) E.L.T. 153 (All). It may also be relevant to quote the following observation of the Hon'ble Apex Court in the case of Indue Nissan Oxo Chemicals Industries Limited Vs. Union of India Ors., (2007) 13 SCC 487. "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 legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee by a biding precedent like that of the judgment of the Supreme Court, jurisdictional High Court or a Special Bench of the Tribunal, then to still insist upon the deposit of duty and penalty levied would certainly cause undue hardship to the assessee. Absence of the financial hardship in such a case would be no ground to decline the dispensation of pre-deposit under the proviso to Section 35F. The power to dispense with such deposit is conferred under the authorities has to be exercised precisely in cases like this type and if it is not exercised under such circumstances then this Court will require it to be exercised. Such like cases where two views are not possible then the condition of pre-deposit before the appeal is heard on merits, can be dispensed with. In case two views are possible on interpretation, based on conflicting judgments of the Tribunal or different High Courts in the absence of the judgment of the jurisdictional High Court then the authorities may pass the order under proviso to Section 35F of the Act keeping in view the facts of the case in hand." In view of above exposition of law, the arguments advanced on behalf of revenue have no for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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