SARVODAYA SUITINGS LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) By the Court: In this writ petition, the petitioner has questioned the Order dated 30-1-2014 (Annex. 1), as passed by the Commissioner (Appeals-II), Customs & Central Excise, Jaipur on its prayer for stay over recovery proceedings during pendency of the appeal against the Order-in-Original No. 134/ST/JP-II/2011, dated 11-11-2011, as passed by the Joint Commissioner, Central Excise, Jaipur-II. By the impugned order dated 30-1-2014, the Appellate Authority has directed the appellant to deposit service tax amounting to Rs. 27,22,638/- within two weeks and has ordered that upon such deposit, recovery of interest and penalty would remain stayed until disposal of the appeal. The subject-matter of this writ petition being confined to the prayer for interim relief until final disposal of the appeal before the said Appellate Authority, suffice would be to notice, in brief, the relevant background aspects of the matter as follows : The referred appeal arises out of the aforesaid order dated 11-11-2011, which came to be passed by the Joint Commissioner with the finding that the petitioner was having two divisions, namely, Textile Division and Online Business Marketing Division ('SOBM'). In Textile Division, three units were engaged in multi level marketing of various types of goods. It was observed that SOBM were making payment of commission to their distributors after deduction of renewal fees and card charges; and the amount so deducted was taken as liable to Service Tax w.e.f. 2005-06 under the category of "Business Support Service". The Joint Commissioner ultimately ordered recovery of Service Tax amounting to Rs. 27,22,638/- and also ordered recovery of interest and penal-

(2.) In the appeal preferred by the present petitioner, the appellate authority in its impugned order dated 30-1-2014 has made the aforesaid directions against the condition of pre-deposit. In this writ petition, against the aforesaid order relating to the condition of pre-deposit, on 6-5-2014, the submissions of the petitioner were noted that it had deposited in the account of the respondents a sum of Rs. 13,61,321/- on 5-5-2014, representing 50% of the amount ordered to be paid by the Appellate Authority.

(3.) The learned counsel for the petitioner has particularly referred to the stand of the petitioner in context of the Order-in-Original and submitted that the petitioner has strong prima facie case to maintain that the activity in question does not attract the levy of Service Tax. It is submitted that if the petitioner is forced to part with the substantial amount against the demand in question, it would be causing the petitioner undue hardship.