IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.390 OF 2009
Wardha Coal Transport Pvt. Ltd. )
a company duly registered under )
the Companies Act, 1956, having )
office at New Majri Colliery, )
WCL, P.O. Shivaji Nagar, )
Chandrapur 442 505. )..Petitioners.
V/s.
1. The Union of India )
Through the Secretary), )
Ministry of Finance, )
Department of Revenue, North
Block, New Delhi 110 001.
)
)
)
2. The Commissioner of Central )
Excise, Nagpur Telangkhedi Road, )
Civil Lines, Nagpur. )
)
3. The Customs, Excise & Service )
Tax Appellate Tribunal (CESTAT) )
through the Registrar, Jai )
Centre, 34, P.D'Mello Road, )
Masjid, Bunder (East), )
Mumbai - 400 009. )..Respondents.
Mr.V.Shridharan with Prakash Shah i/b. M/s. PDS
Legal for petitioners.
Mr.R.V.Desai, senior Advocate with Rajinder Kumar
for respondents.
CORAM : SMT.RANJANA DESAI AND
J.P.DEVADHAR, JJ.
DATED : 14TH JANUARY, 2009.
ORAL JUDGMENT (PER SMT. RANJANA DESAI, J.)
1. Rule. Rule made returnable forthwith.
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2. Learned counsel for the respondents waive
service. By consent of the parties, matter is taken
up for final hearing forthwith.
3. The petitioners are an ex-servicemen company incorporated under the Companies Act, 1956.
The petitioners and similar other companies are incorporated pursuant to a Memorandum of Understanding entered into with the Ministry of Energy and the Ministry of Defence. The shares of the are held by war widows and disabled soldiers.
petitioners
4. In the present petition filed under 226 of the Constitution of India, the petitioners are challenging the order dated 8/10/2008 passed by the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench at Mumbai ('tribunal' for short) in Appeal No.ST/167/08-Mum, wherein the tribunal has directed the petitioners to deposit a sum of Rs.30 lacks as a condition for hearing the appeal filed by the petitioners against the order in original dated 1/5/2008 passed by respondent No.2.
5. The basic question in this case is whether
the definition of "cargo handling service" under the
Finance Act, 1994 includes the kind of activities
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undertaken by the petitioners. The petitioners case
is that their activities are not covered by the said
definition and hence the same are not chargeable to
service tax. The Assistant Commissioner of Central
Excise, Nagpur returned a finding vide
order-in-original dated 1-5-2008 that the services
rendered by the petitioner's fall under the category
of 'cargo handling services' and hence chargeable to
service tax. The petitioners carried on appeal to the
tribunal under Section 86 of the Finance Act, 1994.
The petitioners
predeposit
under
filed an application for
Section 35F of the Central
waiver
Excise
of
Act, 1944. By the impugned order, the demand for
complete waiver was rejected. Hence, this writ
petition.
6. We have heard at some length learned
counsel for the petitioners. He submitted that the
tribunal has erred in rejecting the application for
complete waiver of predeposit filed by the
petitioners. He drew our attention to the order
passed in Application No.ST/S/914/08 in Appeal
ST/116/08 dated 29/7/2008 passed by the tribunal in
SSV Coal Carriers Pvt. Ltd. V/s. Commissioner of
Central Excise, Nagpur and contended that in that case in some what similar situation, the tribunal has ordered full waiver of predeposit of the amount in ::: Downloaded on - 09/06/2013 14:14:22 :::
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question and stayed recovery pending the appeal.
Learned counsel submitted that the petitioners have a strong prima facie case. He drew our attention to the judgment of the tribunal in Sainik Mining & Allied Services Ltd. V/s. Commr. of C. Ex., Cus. & S.T., BBSR 2008 (9) S.T.R. 531 (Tri.- Kolkata), Kolkata wherein the tribunal has considered the question involved in the instant case and come to a conclusion that the type of cargo handling activities undertaken by the petitioners are not covered by the definition of "cargo Learned counsel handling service" under the Finance Act, 1994.
submitted that, therefore, the tribunal erred in rejecting the application of the petitioners.
7. We have heard Mr.R.V.Desai, learned senior Advocate for the respondents. Mr.Desai submitted that the present case can be distinguished from the facts which were before the tribunal in Sainik Mining & Allied Services Ltd.'s case (supra).
(supra) Learned counsel
drew our attention to the Assistant Commissioner's
order wherein it is noted that the Director of the
petitioners has admitted that the cargo handling
services were rendered by the petitioners. Mr.Desai
further submitted that under section 35(F) of the
Central Excise Act, 1944 for waiver of predeposit, the petitioners have to establish a prima facie case as ::: Downloaded on - 09/06/2013 14:14:22 :::
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well as undue hardship. He submitted that the petitioners have failed to establish undue hardship.
He submitted that there is no averment about undue
hardship even in the present Writ Petition. He relied
upon the judgment in Indu Nissan OXO Chemicals
Industries Ltd. V/s. Union of India; 2008 (221)
E.L.T. 7 (S.C.),
(S.C.) wherein while considering a similar provision contained in Section 129 (E) of the Customs Act, 1962, the Supreme Court has observed that in the said provision two significant expressions are used namely, of "undue hardship" and "safeguard the interests revenue". Therefore, while dealing with such matters, the Court is required to consider undue hardship of a person and safeguarding the interest of revenue. Learned counsel further pointed out that the Supreme Court also observed that the question of undue hardship is within the special knowledge of the applicant for waiver and has to be established by him and that undue hardship is caused when the hardship is not warranted by the circumstances. Learned counsel submitted that the petitioners have failed to establish undue hardship and, therefore, the application has been rightly rejected by the tribunal.
8. It is not possible for us to agree with Mr. Desai. It is pertinent to note that in similar fact situation in SSV Coat Carriers Pvt. Ltd., the ::: Downloaded on - 09/06/2013 14:14:22 :::
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tribunal has granted the prayer for waiver of predeposit. Similarly, in Kartikay Bulk Movers Pvt.
Ltd. V/s. Commissioner of Central Excise, Nagpur delivered on 7-10-2008, where also the facts were somewhat similar, waiver of predeposit has been granted. Moreover, the tribunal in Sainik Mining & Allied Services Ltd.'s case (supra) has come to the conclusion that service tax liability does not arise in such cases. Learned counsel for the petitioners is right in contending that the petitioners have a prima facie of the case.
Supreme We may usefully refer to the observation Court in Indu Nissan Oxo Chemicals Industries Ltd.'s case (supra), wherein the Supreme Court has observed that:-
" It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand...... "
9. Viewed in the light of above observations, we are of the opinion that the impugned order deserves to be set aside and is set aside accordingly. Once the tribunal has granted full waiver atleast in two similarly situated cases, it would not be proper to take a different view and deny full waiver of ::: Downloaded on - 09/06/2013 14:14:22 :::
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predeposit. Accordingly, we direct waiver of predeposit of the amounts in question and stay recovery thereof pending appeal.
10. We make it clear that observations made by us touching the merits of the case are prima facie observations and the tribunal shall decide the appeal independently on its own merits and in accordance with law.
11. Rule is with no order as to costs.
made absolute in the above terms (SMT.RAJANA DESAI, J.) (J.P.DEVADHAR, J.) ::: Downloaded on - 09/06/2013 14:14:22 :::