Judgement of the Andhra Pradesh High Court setting aside the Order passed by the CESTAT in the appeal filed by the Commissioner of Central Excise, Guntur Commissionerate, Guntur. (2011 -TIOL-147-HC-AP-ST)
The respondent runs various coaching centers in Andhra Pradesh and other States in India.The respondent’s activity of commercial training or coaching service attracts levy of service tax under Section 65(26) and Section 65(27) read with Section65(105)( zzc ) of the Finance Act, 1994 (henceforth referred as „the Act‟). After coming into force of the amendment to Section 65(1 05)(zzc) of the Act, in spite of advice by the Revenue, the Respondent did not obtain registration. The Respondent informed the Range Officer that there was no legal obligation to obtain registration under service tax. However, the respondent belatedly obtained Centralized Service Tax registration.
Contentions of the Revenue
The Revenue contended that the stay order of the CESTAT should be set aside on the following grounds:
Contentions of the Respondent
The contentions of the Respondent were as under:
Decision of the High Court
– The applications for stay should not be disposed of in a routine manner, unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand;
– Three aspects to be focused while dealing with the applications for dispensing of pre- deposit are: (a) prima facie case, (b) balance of convenience, and (c) irreparable loss;
– Interim orders ought not to be granted merely because a prima facie case has been shown;
– The balance of convenience must be clearly in favor of making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the interest of public revenue;
– While dealing with the applications, twin requirements to be satisfied, i.e., consideration of undue hardship and imposition of conditions to safeguard the interests of revenue;
– When the Tribunal decides to grant full or partial stay, it has to impose such conditions as may benecessary to safeguard the interests of the Revenue. This is an imperative requirement; and
─ An Appellate Tribunal, being a creature of the statute, cannot ignore the statutory guidance while exercising general powers or expressly conferred incidental powers.
The Appeal was allowed and the Order of the CESTAT was set aside with a direction to consider the matter afresh in the light of the observations in the judgement. It may be noted that in Ravi Gupta‟s case (2009-TIOL47-SC-CT), the Supreme Court observed that merely because the principles of stay have been laid down in Dunlop India (2002-TIOL-156-SC-CX), it does not mean that the order should be passed mechanically without looking at the facts. These observations and principles are now likely to be applied in the matter/s before the CESTAT.
Source: Judgement of the Andhra Pradesh High Court setting aside the Order passed by the CESTAT in the appeal filed by the Commissioner of Central Excise, Guntur Commissionerate, Guntur. (2011 -TIOL-147-HC-AP-ST)