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Case Law Details

Case Name : Mukesh Kumar Singh Vs Commissioner (Appeals) CGST & C. Ex (Jharkhand High Court)
Appeal Number : W.P (T) No. 1524 of 2021
Date of Judgement/Order : 31/01/2023
Related Assessment Year :

Mukesh Kumar Singh Vs Commissioner (Appeals) CGST & C. Ex (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.

In view of the reasons recorded hereinabove, the impugned order dated 12.02.2021 (Annexure-8) passed by the Commissioner (Appeals), Central GST & CX, 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.

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 issuance of an appropriate writ, order or direction, directing upon the Respondents, morefully Respondent No. 1 to show cause as to how the Appeal of the petitioner could be dismissed on the ground of non-deposit of mandatory pre-deposit, after having heard the Appeal on merits and without providing any instructions / assistance to the petitioner for making pre-deposit, when admittedly the petitioner is a non-registered dealer under the Service Tax Act.

b. Consequent upon showing cause, if any, and on being satisfied that the Respondent No. 1 could not have dismissed the Appeal of the petitioner, without providing any instruction / assistance to the petitioner for making pre-deposit, when admittedly the petitioner is an unregistered dealer, the order dated 12.02.2021 (Annexure-8), passed by the Respondent No. 1 be quashed and set aside.

c. For issuance of an appropriate writ, order or direction, directing upon the Respondents to revive the appeal of the petitioner and decide it on merits, after issuing necessary instructions / assistance, to facilitate the petitioner to make mandatory pre-deposit.

IN THE ALTERNATIVE

d. For issuance of an appropriate writ, order or direction, quashing and setting aside the order dated 14.08.2020 (Annexure-4), passed by the Ld. Assistant Commissioner, Central GST & Central Excise, Jamshedpur, whereby and where under the said authority has been pleased to impose service tax to the tune of Rs. 1,87,392/- along with interest on the confirmed demand, as also, a penalty of Rs. 1,87,392/- under Section 78 of the Finance Act, 1994, penalty of Rs. 10,000/- under Section 77(2) of the said Act, a separate penalty of Rs. 10,000/- under Section 77(1)(a) and a penalty of Rs. 87,600/- under Section 77(1)(c)(ii) of the said Act, for the financial year 2014-15, which was communicated to the petitioner vide Order No. 18/S.Tax/Div-I/2020.

3. Petitioner, a non-registered dealer / Government contractor engaged in providing construction services to the State Government, on an impression that it is exempted from levy of service tax as per Entry No. 12/12A of Notification No. 25/2012-ST dated 20.06.2012 (Annexure-1), did not pay the service tax liability, as a result of which, he was faced with a proceeding under show-cause notice dated 07.11.2019 (Annexure-2) issued by the Assistant Commissioner, Central GST & CX, Jamshedpur (Respondent No. 2). Petitioner participated in the proceeding, but by Order-in-Original dated 14.08.2020, petitioner was saddled with the liability of service tax to the tune of Rs. 1,87,392/- with interest and penalty, treating the same as income of the petitioner (Annexure-4). The appeal preferred by the petitioner before the learned Commissioner (Appeals), CGST & C. Ex on 11.09.2020 has been dismissed on the sole ground of non-payment of mandatory pre-deposit.

4. Learned counsel for the petitioner submits that since the petitioner was unregistered dealer, it was unable to make online payment of pre-deposit of interest / penalty. Petitioner was bearing an impression that since he is a Government contractor and services are exempted, he is not liable to take registration under the Act. However, since the appeal was dismissed only on the ground of non-payment of mandatory pre-deposit of 7.5% of the tax liability, he has preferred the instant writ petition.

5. 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.

6. 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’.

7. 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.

8. In view of the reasons recorded hereinabove, the impugned order dated 12.02.2021 (Annexure-8) passed by the Commissioner (Appeals), Central GST & CX, 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.

9.  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.

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