By TIOL News Service

MUMBAI, AUGUST 07, 2017: THE matter was listed for maintainability of appeal for want of pre-deposit.

The appellant has submitted that a total service tax demand was raised of Rs.19,48,95,104/- against which an amount of Rs.19,83,47,424/- was deposited, and, therefore, no further pre-deposit was required.

None appeared on behalf of the appellant.

The AR submitted that the impugned order only confirmed penalty and interest and there is no order for demand of service tax. Inasmuch as, duty/tax is not under dispute but only penalty and interest and, therefore, appellant is required to make pre-deposit of 10% of penalty amount of Rs.97,44,755/-.

The Bench extracted the operative portion of the order passed by the adjudicating authority and which reads -

(i) I confirm demand of interest at the appropriate rates to be recovered from M/s VEL under section 75 of the Finance Act, 1994 in respect of the service tax belatedly paid and or payable by them.

(ii) I impose penalty of Rs.97,44,755/- (Rupees Ninety seven lakh forty four thousand seven hundred fifty five only) on M/s VEL under the provisions of section 76 of the Finance Act, 1994 for failure to pay service tax on time in accordance with the provisions of section 68 of the said Act read with Rule 6 of the Service Tax Rules, 1994.

(iii) I confirm imposition of fine of late fee amounting to Rs.67,400/- (Rupees sixty seven thousand four hundred only) as applicable under section 70 of the Act read with rule 7C of the Service Tax Rules, 1994, to be recovered from M/s VEL for not filing the ST-3 returns prescribed under rule 7 ibid within the due dates for filing such returns till the date of filing such returns.

The CESTAT, therefore, observed -

"…, it can be seen that there is no service tax amount which is under dispute. The dispute is regarding penalty, interest and late fee. Therefore, in terms of section 35F, the appellant is required to deposit 10% of duty if duty and penalty is under dispute and if only penalty is under dispute then 10% of such penalty should be deposited as a pre-deposit. We, therefore, of the view that appellant is required to make pre-deposit of 10% penalty imposed in the impugned order. In the interest of justice, we allow the appellant to make such pre-deposit within a period of 4 weeks and compliance of the same be reported on 11.08.2017…"

It is also emphasized that in case the appellant failed to make the pre-deposit by the appointed date, the appeal would stand dismissed.

(See 2017-TIOL-2808-CESTAT-MUM)