DD Interiors Vs Commissioner of Service Tax & Anr. (Delhi High Court)
Delhi High Court has ruled that the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) cannot reject an appeal solely because the pre-deposit was made in the wrong account, particularly when the payment rules were unclear at the time. The petitioner, M/s DD Interiors, challenged CESTAT’s decision to dismiss their appeal for non-compliance with the pre-deposit condition under Section 35F of the Central Excise Act, 1944. The petitioner had made the required deposits in August 2018, but CESTAT refused to acknowledge them, citing that they were credited to an incorrect account. The petitioner argued that at the time of payment, there was confusion regarding the tax payment process due to the transition to the GST regime. Furthermore, the integrated portal for pre-deposits was not yet operational.
The court found that the deposit had been made in compliance with the existing system at the time and that the rules were later clarified through CBIC instructions. The court referred to a similar judgment by the Bombay High Court in the Sodexo India Services case, which held that dismissing an appeal for procedural reasons without addressing the merits amounts to a denial of justice. The court ruled that CESTAT must now hear the appeal without requiring any further pre-deposit, as the payments already made satisfy the legal conditions. The petitioner has been permitted to re-file the appeal within 30 days, and CESTAT has been directed to consider it on merits without dismissing it for procedural technicalities.
