Whether Rs 18 Cr of Service Tax dues has really been paid - A question of verification - Journey from CESTAT to HC
THIS case has seen many ups and downs since the day it entered the hallowed portals of the CESTAT.
We reported the journey in the CESTAT on two occasions thus -
ST - CESTAT granting waiver of pre-deposit as appellant claimed that they had paid entire demand - on verification, it was found that only Rs.6 Crores had been paid - Order recalled and appellant directed to pay balance along with 25% penalty - Contempt initiated: CESTAT [ 2012-TIOL-943-CESTAT-MUM - order dated 28/06/2012 ]
Note - In this case, the CESTAT had earlier granted an unconditional waiver of pre-deposit of Interest and Penalty subject to the verification of the submission made by the applicant that the entire amount of Service Tax of Rs.18,08,18,228/- had been paid. However, in the verification report submitted by the Revenue representative it was mentioned that out of the total demand of Rs.18,08,18,228/- the appellant had deposited only Rs.6,24,21,219/-. So, a recall was ordered of the earlier Stay order. Later, the appellant filed an application for modification and also tendered unconditional apology. The matter was heard and the Bench passed the following order -
ST - Contempt notice for misleading the Bench - Application for modification of Miscellaneous order - contentions raised by appellant are not acceptable as Stay was granted considering the statement of the Counsel while disposing Stay application - if the submissions are accepted then it will amount to review of order which is not permissible in the eyes of law - time extended for making pre-deposit - in view of unconditional apology tendered, SCN issued for initiation of contempt proceedings withdrawn: CESTAT [ 2012-TIOL-1732-CESTAT-MUM ]
By this order dated 15/10/2012 the Bench dismissed the application for modification of the miscellaneous order dated 28/06/2012 and had directed the applicant to make a pre-deposit of the balance amount of service tax in dispute apart from that already made along with 25% of penalty within a further period of eight weeks and report compliance on 27/12/2012.
The appellant had moved the Bombay High Court against this order by filing a Central Excise Appeal.
The appeal was admitted and the High Court has passed the following order -
"7. In the circumstances, we issue the following directions:
(i) The Appellant shall, within a period of two weeks from today, produce before the Commissioner, Central Excise, Pune-I Commissionerate documentary evidence including tax challans in support of the case of the Appellant of having paid the entire dues on account of service tax amounting to Rs.18.08crores;
(ii) The Commissioner, Central Excise, Pune-I Commissionerate shall thereafter on or before 20 February 2013, hear the Appellant and shall submit a report on or before 2 March 2013 to the Tribunal upon verifying as to whether the entire service tax dues have been paid as claimed and if not, the extent to which the dues of Rs.18.08crores remain outstanding;
(iii) The proceedings shall thereupon be listed before the Tribunal for further orders on 11 March 2013. Upon verification, if it is found that the entire service tax dues of Rs.18.08crores have been paid by the Appellant, the Appellant shall then be entitled to a waiver of the pre-deposit of the penalty and interest;
(iv) In the event that if it is found upon verification that the Appellant has failed to pay the entire service tax dues of Rs.18.08crores, the Appellant shall, in compliance with the order of the Tribunal dated 28 June 2012 within a period of four weeks of the date of determination by the Tribunal, pay the balance of the dues that are outstanding together with 25% of the penalty demanded as directed by the Tribunal."
In order to enable the Tribunal to pass a fresh order, the High Court set aside the CESTAT order dated 15 October 2012 passed on the application for modification and restored the application for consideration afresh in terms of the directions issued above.
The appeal was accordingly disposed of.