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Even if the assessee does not comply with the provisions of pre-deposit, the appeal cannot be dismissed without hearing on merits.
Facts:
The appeal was dismissed without hearing on merits due to non-compliance with the stay order of the Appellate Tribunal. Relying on the Hon’ble Supreme Court’s decision in case of Balaji Steel Re-Rolling Mills 2014 (310) ELT 209, it was argued that the appeal must be adjudicated on merits irrespective of such non-compliance. The department contended that the Tribunal’s order did not require any interference since it did not raise any substantial question of law. The questions of law put forth before Hon’ble High Court was that since modification of stay application was pending, financial hardship pleaded by assessee was not considered and huge service tax liability was already discharged, whether the Tribunal was right in dismissing the appeal? It was also observed that the revenue had recovered certain service tax dues from customers of the appellants. The revenue contested that there would be a recurring liability and the liability and recovery cannot be stopped since appeal for the earlier period was pending.
Held:
The Tribunal cannot dismiss the appeal without hearing on merits. The conditional stay order was complied with albeit belatedly. Further, the bank accounts of appellants were attached and certain recoveries were made from their customers directly by the revenue. For further duty liability, if there is a recovery by coercive means, it would be open for the appellants to adopt such proceedings as are permissible in law in the event they feel aggrieved by the process initiated. All contentions of both sides in that regard were kept open. Without deciding the legal issue, the appeal was restored before Tribunal to be decided on merits and in accordance with law.
