TM INTERNATIONAL LOGISTICS LTD. Vs. CESTAT

JUDGEMENT

(1.) The order dated 24th September, 2013 passed by the Customs, Excise and Service Tax Appellate Tribunal, Calcutta by which an application seeking waiver of the pre-deposit condition is disposed of directing the petitioner to remit the substantive service tax assessed and proportionate interest liability thereon excluding penalty component within four weeks from the date of the said order. The audit memo was issued upon the petitioner and from time to time the queries were raised thereupon. The petitioner replied the queries and also submitted documents in support thereof. Subsequently, a show cause notice was issued on 21st October, 2009 for the alleged violation of Sections 67 and 68 of the Finance Act read with Rules 6 and 7 of the Service Tax Rules, 1994. According to the petitioner, no date for personal hearing was intimated to the petitioner until 22nd February, 2011 wherein it was indicated that the same would be conducted on 8th March, 2011. Indisputably, on the said date the petitioner prayed for a time and the next date was fixed on 22nd March, 2011. Even on the said date the adjournment was sought for indicating that some more time is required to collate the voluminous documents till 8th April, 2011. Subsequently, the Commissionerate of Kolkata proceeded to pass an order confirming the demand of service tax to be paid by the petitioner together with the interest and the penalty. The said order is assailed before the Tribunal apart from other grounds that the statute provides for three adjournments and the authorities could not have proceeded in haste. The CESTAT while disposing of an application seeking waiver of pre-condition deposit proceeded on the basis that the petitioner has not refuted the averments made in the said show cause notice and the documents, which are filed before the CESTAT cannot be accepted in absence of any application in this regard. Apart from the aforesaid ground, my endeavour has failed to find out whether the CESTAT has recorded any other reasons for disposal of the said application. Mr. Saraf, however, tried to impress upon the Court that the CESTAT did not commit any infirmity and/or illegality in disallowing the waiver to the petitioner as the petitioner chose not to indicate the averments made in the said show cause notice. He further tried to contradict that although the statute provides the maximum adjournment on three occasions but the same is not the rule of rigidity and the authorities are not denuded of any power to reject the application for adjournment even on the first or the second occasion. What is tried to be contended is that when a maximum period is provided in the statute for an adjournment, the adjournment should not be granted mechanically as it is not an automatic process. It admits no quarrel to the settled principles of law that the tribunal shall consider an application seeking waiver of the pre-condition deposit on the principle that there exists a prima facie case, which is embodied within the expression 'undue hardship' and the interest of the Revenue is to be guarded. My attention is drawn to the order of the Assessing Officer where it is recorded that an interim reply was filed by the petitioner and thereafter the determination is made which, obviously, leads to inference that the documents produced along with the interim reply was also taken note of. The petitioner says that recording of such finding is incorrect, inasmuch as, the petitioner did not file any reply to the said show cause notice and, therefore, the basis of the determination is improper. However, the petitioner tried to take a shelter on the plea that the reply to audit memo was given extensively containing all the documents and the authorities should have taken into consideration at the time of making final determination in a proceeding initiated on the basis of the show cause notice issued subsequently. The petitioner further says that the documents, which were already available in the record were intended to be filed before the CESTAT and, therefore, the CESTAT would not have refused to consider those documents on the plea that the same is not supported by any application for production of the additional evidence.

(2.) This Court finds that the CESTAT has not recorded any reason on the merit of the said application except on the above technicalities. Admittedly, the Assessing Officer passed an order after rejecting an application for adjournment and have proceeded to decide the matter ex parte. The order of the Assessing Authorities before the CESTAT is to be decided upon taking note of all materials available on the record or legally permissible to be brought on record and, therefore, the CESTAT ought to have recorded its finding on the merit and more particularly within the provisions contained under Section 35F of the Central Excise Act. The CESTAT should record its finding on the prima facie case as well as on the balance of convenience and inconvenience and the irreparable loss and injury to be caused to the petitioner and shall also take into account the interest of the Revenue at the time of passing any order on the waiver of the precondition deposit.

(3.) The aforesaid findings are lacking in the impugned order and this Court finds that the said order is not sustainable. The order impugned is quashed and is set aside.