Municipal Council, Gidderbaha Vs Commissioner Of CGST & Central Excise Ludhiana (CESTAT Chandigarh)
In the case of Municipal Council, Gidderbaha vs. Commissioner Of CGST & Central Excise Ludhiana, the Central Excise and Service Tax Appellate Tribunal (CESTAT) intervened to rectify an erroneous rejection of an appeal. The Commissioner had initially accepted the appeal but later dismissed it on the grounds of non-compliance with the mandatory pre-deposit requirement under Section 35F. This article delves into the details of the case, the key issues raised, and how the CESTAT rectified the situation.
Background: The case involved allegations against the Municipal Council, Gidderbaha, regarding the provision of services related to “renting of immovable property services” and selling of advertising space. The council was accused of failing to discharge their due service tax liability, leading to the issuance of four show cause notices.
Show Cause Notices: The show cause notices covered different periods and demand amounts, totaling a significant sum.
- SCN No. 1: Rs. 12,73,150/-
- SCN No. 2: Rs. 2,45,506/-
- SCN No. 3: Rs. 5,63,607/-
- SCN No. 4: Rs. 1,35,740/-
Appeal to Commissioner (Appeals): After the Assistant Commissioner confirmed the demand with certain adjustments, the appellant filed an appeal before the Commissioner (Appeals). The appeal was initially accepted and scheduled for a hearing on merits.
Pre-Deposit Compliance: During the course of the appeal process, the appellant informed the authorities that they had deposited Rs. 10,35,881 towards the mandatory pre-deposit as required by Section 35F. This fact was communicated through a letter dated 11.03.2017.
Erroneous Rejection: However, after a lapse of time, the Commissioner (Appeals) rejected the appeal, citing non-compliance with Section 35F. Surprisingly, this objection regarding mandatory pre-deposit was not raised or addressed during the appeal hearing. The Commissioner (Appeals) did not verify the facts or obtain a report from the lower authority regarding the deposit of the required amount.
CESTAT Intervention: The CESTAT, upon reviewing the case, found that the Commissioner (Appeals) had entertained the appeal without raising any objections related to mandatory pre-deposit. The appeal had proceeded to be heard on its merits. Subsequently, the Commissioner (Appeals) improperly rejected the appeal for non-compliance with Section 35F. The CESTAT ruled that the appellant had indeed complied with the mandatory pre-deposit requirement.
Remand for Merit: As a result, the CESTAT set aside the erroneous order passed by the Commissioner and remanded the matter back to the Commissioner (Appeals) for a fresh decision on the merits of the case. The Commissioner (Appeals) was directed to dispose of the appeal within three months from the date of receiving the certified copy of the CESTAT’s order.
Conclusion: The case of Municipal Council, Gidderbaha vs. Commissioner Of CGST & Central Excise Ludhiana serves as a reminder of the importance of proper procedural compliance and the need for thorough verification of facts. In this instance, an appeal was initially accepted, heard on merits, and then incorrectly rejected based on pre-deposit compliance. The CESTAT’s intervention rectified the situation, emphasizing the principle that appeals should not be rejected without due consideration of procedural compliance.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 30.12.2022 passed by the Commissioner whereby the Commissioner has rejected the appeal of the appellant being not maintainable for failure to deposit mandatory pre-deposit.
2. Briefly the facts of the present case are that there are allegations against the appellant that they had provided services namely “renting of immovable property services” defined under Section 65(105)(zzzz) of the Finance Act, 1994 and selling of space or time slots for advertisements defined under Section 65(105)(zzzm) of the Act but failed to discharge their due service tax liability. On these allegations, four show cause notices were issued to the appellant under Section 73(1)/73(A) of the Finance act, 1994. The details of the four show cause notices and the period of demand and the demand amounts are given hereinbelow:-
