Case Law Details
Amar Enterprises Vs Commissioner Central GST & Central Excis (Jharkhand High Court)
Admittedly, petitioner is an unregistered dealer. His appeal has been dismissed on the ground of non-payment of mandatory pre-deposit. It does not appear that there was intent on the part of the petitioner to avoid payment of pre-deposit @7.5% as provided under the amended section 35F of Central Excise Act, 1944. Respondents have also adverted to the facility provided under the RBI Instruction for making such pre-deposit by unregistered dealer / registered non-assessees. In those circumstances, interest of justice would be met if the matter is remanded to the Appellate Authority. Petitioner is required to make pre-deposit within a period of four weeks from today.
FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND HIGH COURT
Heard learned counsel for the parties.
2. Writ petition was preferred with the following prayer (s).
a. For quashing of the order in original dated 31.01.2022 & 30.06.22 (Annexure-4 and 4/1) passed by Deputy Commissioner, CGST & Central Excise whereby and where under the said authority has imposed service tax liability of Rs. 7,66,636/- upon the petitioner and has further imposed same amount of penalty with interest without appreciating the fact and circumstances of the case.
b. For setting aside the order in appeal dated 08.07.2022 (Annexure-5) passed by the Commissioner, Central GST & Central Excise, Ranchi, Jharkhand whereby and where under the concerned authority has without taking into consideration the merit of the case, rejected the appeal of the petitioner merely on the non-deposit of mandatory pre-deposit of 7.5% of the duty and penalty.
c. For remitting back the matter before the court of Commissioner, Central GST & Central Excise, Ranchi, Jharkhand for hearing the appeal on merit on pre-deposit of 7.5% of the amount of duty considering the fact that during the relevant period and even during the course of hearing through online mode due to COVID-19, the petitioner was never asked to pre-deposit 7.5% of the duty imposed.
3. Petitioner is registered with the Central Public Works Department (CPWD), SAIL, MECON, Airport Authority of India and is performing electrical repair and maintenance work on contract basis. During the Financial Year 2015-16 and 2016-17, petitioner executed certain contracts with CPWD. Labouring under an impression that it was exempted from payment of service tax under Notification No. 25/2012 dated 20.06.2012 issued by the Ministry of Finance, Government of India for services provides to the Government / local authority / governmental authority by way of construction, commissioning, erection, installation, etc., petitioner did not make payment of service tax liability, as a result of which, he was faced with a show-cause notice dated 03.06.2020 issued by the Respondent No. 2 making a demand of Rs. 7,66,636/-against the payment received from the respondent CPWD for the works executed during the Financial Year 2015-16 and 2016-17 (Annexure-1). Petitioner did participate in the adjudication proceeding but was imposed with the liability vide Order-in-Original dated 31.01.2022 confirming the demand of service tax amounting to Rs. 7,66,636/- under Section 73(2) of the Finance Act, 1994 read with Section 174 of CGST Act, 2007 and penalty of the same amount as per Section 78 of the Finance Act, 1994 read with Section 174 of CGST Act, 2017. The appeal preferred by the petitioner before the learned Commissioner, CGST and Central Excise, Ranchi bearing Order-in-Appeal No. 88/RAN/2022 has been dismissed solely on the ground of non-payment of mandatory pre-deposit of 7.5% of the duty and penalty under section 35F of Central Excise Act, 1944.
4. However, during course of the proceeding, learned counsel for the writ petitioner submitted that since the petitioner was unaware of the facility of making online payment through RBI Portal, he may be also allowed to make pre-deposit so that appeal can be heard on merits. Petitioner did not have any intention to avoid making pre-deposit, but being unaware of RBI Instruction No. RBI/2008-09/165 dated 05.09.2008, he could not make online payment of pre-deposit. Learned counsel for the petitioner has not pressed the other grounds on merits of Order-in-Original.
5. Learned counsel for the Respondents has objected to the plea relating to non-payment of pre-deposit under section 35F of Central Excise Act, 1944. It is submitted that the petitioner’s plea of non-payment of mandatory pre-deposit of 7.5% of the Duty has been dealt with at paragraph-15 and 17 of the counter affidavit. It is submitted that dismissal of the appeal on the ground of nonpayment of pre-deposit is not arbitrary, rather in accordance with law. However, learned counsel for the Respondents has placed before this Court FAQ issued by the CBIC in response to the query no. 5 and 6 making the following answers:
(5) I don’t have a PAN based registration, but I want to make a payment towards my old arrears. Can I make the payment without having to get myself registered?
It is necessary to have a valid registration number from the Central Excise/Service Tax Department for making any payment. If you are not a regular assesse with the department but needs to effect e-payment, you can obtain registration as “Non-assessee” by logging into http://www.aces.gov.in and choosing the option “CENTRAL EXCISE” or “SERVICE TAX”.
(6) How will a non-assessee without a registration number pay any arrears or make any miscellaneous payment?
Any person who wants to make payment of Central Excise duty or Service Tax but is not a registered assessee will have to get registered as ‘non-assessee’ under ACES at http://www.aces.gov.in. The Reserve Bank had issued instruction no. RBI/2008-09/165 dated 05.09.2008 to the banks to accept payments by such registered ‘non-assessees’.
6. We have considered the submission of learned counsel for the parties and taken into account the relevant material facts placed from the pleadings on record in the light of the limited relief now being pressed by the petitioner. Admittedly, petitioner is an unregistered dealer. His appeal has been dismissed on the ground of non-payment of mandatory pre-deposit. It does not appear that there was intent on the part of the petitioner to avoid payment of pre-deposit @7.5% as provided under the amended section 35F of Central Excise Act, 1944. Respondents have also adverted to the facility provided under the RBI Instruction for making such pre-deposit by unregistered dealer / registered non-assessees. In those circumstances, interest of justice would be met if the matter is remanded to the Appellate Authority. Petitioner is required to make pre-deposit within a period of four weeks from today.
7. In view of the reasons recorded hereinabove, the impugned order dated 08.07.2022 (Annexure-5) passed by the Commissioner, CGST & Central Excise, Ranchi (Respondent No.1) is set aside. If the petitioner makes the mandatory pre-deposit within a period of four weeks, as indicated above, appeal shall be heard on merits.
8. Writ petition is allowed in the manner and to the extent indicated hereinabove. Let it be made clear that we have not gone into the merits of the case of the parties.
