Kapileshwar Jha vs. Assistant Commissioner, Service Tax Division, Durgapur Commissionerate And Ors.
Held
The Court held that the order of the Commissioner of Appeals, which had been merged with the decision of the Tribunal, should be set aside. The Court found merit in the appellant's submission that the mandatory pre-deposit amount of Rs. 1,62,692/- had since been deposited. The reasoning was that allowing the appeal to proceed after the deposit would serve the ends of justice, especially considering the procedural history, including the dismissal of the appeal before the CESTAT due to the advocate's negligence. The Court's decision to set aside the order and remand the matter for a fresh hearing indicates a recognition of the appellant's subsequent compliance and a desire to provide an opportunity for the merits of the case to be considered. The ratio decidendi is that procedural lapses, particularly concerning pre-deposits, can be condoned if the required amount is subsequently paid, allowing for a fresh adjudication on the substantive issues. The operative direction was to remand the matter back to the Commissioner of Appeals for a fresh hearing within three months.
Facts
The appellant, Kapileshwar Jha, was issued a summon under Section 14 of the Central Excise Act, 1944, made applicable to service tax, for the period 2008-09 to 2012-13. Allegations included failure to obtain service tax registration and discrepancies between balance sheets, bank statements, and service tax returns. The appellant admitted to being unregistered for one year (2008-09) but paid the corresponding tax. Explanations were provided for bank deposits and abatements claimed in ST-3 returns, though substantiating documents were not produced. A service tax liability of Rs. 27,12,719/- was determined, with Rs. 5,43,498/- paid. A Show Cause-cum-Demand Notice dated 22.10.2013 proposed a demand of Rs. 21,69,221/-. This was confirmed by an Order-in-Original dated 31.03.2017, which also imposed penalties and late fees, totaling Rs. 43,52,442/-. The appeal before the Commissioner of CGST & Central Excise, Siliguri Appeals, was rejected for non-payment of a 7.5% pre-deposit of Rs. 1,62,692/-. A subsequent appeal before the CESTAT, Kolkata, was dismissed due to the appellant's advocate's negligence.
Key Issues
1. Whether the Commissioner of Appeals was justified in rejecting the appellant's appeal solely on the ground of non-payment of the mandatory 7.5% pre-deposit, despite the appellant subsequently depositing the said amount? Petitioner's Argument: The appellant argued that they have since deposited the mandatory 7.5% pre-deposit amount of Rs. 1,62,692/- and therefore prayed for a direction to the Commissioner of Appeals to rehear the matter afresh. The appellant's counsel highlighted the dismissal of the appeal before the CESTAT due to the advocate's negligence. Revenue's Argument: The judgment does not record any specific arguments from the revenue or the respondents regarding this issue. However, the initial rejection by the Commissioner of Appeals was based on the non-compliance with the pre-deposit requirement.
Sections Cited
Section 14, Section 83, Section 69, Section 70, Rule 7C
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ORDER
OD-4 CEXA/5/2023 IA NO:GA/1/2023 BEFORE: THE HON’BLE JUSTICE RAJARSHI BHARADWAJ AND THE HON’BLE JUSTICE UDAY KUMAR Date : 18th November, 2025. Appearance: Mr. Sumit Ghosh, Adv. Mr. Anupam Kumar Dey, Adv. Mr. Bhaskar Sengupta, Adv. Mr. Souradeep Majumdar, Adv. … for Appellant
Mr. Vipul Kundalia, Sr. Adv. Mr. Tapan Bhanja, Adv. Ms. Anushka Mandal, Adv. Mr. Anindya Kanan, Adv. …for Respondents
The Court: Learned counsel appearing for the appellant submits that a summon was issued under Section 14 of the Central Excise Act, 1944 (hereinafter referred to as the “Excise Act”), as made applicable to service tax through Section 83 of the Finance Act, as amended, seeking appearance and production of certain relevant documents such as work orders, balance sheet, bank statement etc., in respect of the period from 2008-09 to 2012-13, before the Superintendent of Central Excise and Service Tax. Accordingly, the appellant appeared and produced
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