JOSE THOMAS PATTARA V. UNION OF INDIA

C.E.Appeal/7/2013

AI Insights

The case involves Jose Thomas Pattara, the appellant, who was directed by the Customs, Excise & Service Tax Appellate Tribunal to deposit a sum of 13 lakhs within 8 weeks as a condition for appealing against a service tax demand. The demand was based on allegations that Pattara had received money from M/s. Puravankara Projects Limited for services rendered as a real estate agent, a classification he contested. The High Court of Kerala, presided over by Chief Justice Dr. Manjula Chellur and Justice A.M. Shaffique, heard the appeal and decided not to interfere with the Tribunal's decision, emphasizing the legal requirement under Section 35F of the Central Excise Act, 1944, which mandates such a deposit unless undue hardship is proven.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 739188 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 24-09-2013
• Assessment Year: misc
• Laws Referred To: Finance Act, Central Excise Act, 1944
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: THOMAS NELLIMOOTTIL
• Assessee Lawyers: P B KUMAR; LEO GEORGE; T T RAKESH
• Keywords: Real estate agent; Service tax; Undue hardship; Deposit Pending Appeal
• Section: 35F; 65(88)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE TUESDAY, THE 24TH DAY OF SEPTEMBER 2013/2ND ASWINA, 1935 C.E.Appeal.No. 7 of 2013 ---------------------------- AGAINST THE ORDER IN ST 88/2012 of CUSTOMS, EXCISE & SERVICE TAX APP.TRIBUNAL,SOUTH ZONAL BENCH,BANGALORE DATED 26/08/2013 .................. APPELLANT/APPELLANT : ---------------------------- JOSE THOMAS PATTARA, AGED 54 YEARS, SON OF LATE P.V.THOMAS, RESIDING AT PATTARA PUTHEN VEEDU, MUHAMMA P.O. ALAPPUZHA - 688 525 BY ADVS.SRI.P.B.SURESH KUMAR (SR.) SRI.LEO GEORGE SRI.T.T.RAKESH RESPONDENTS/RESPONDENTS : ------------------------------------ 1. UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE DEPARTMENT OF REVENUE, CENTRAL SECRETARIAT, NEW DELHI-1. 2. ADDITIONAL DIRECTOR GENERAL, DIRECTORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE, BANGALORE ZONAL UNIT, BANGALORE - 560 086. 3. THE COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, OFFICE OF THE CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, C.R.BUILDING, I.S.PRESS ROAD KOCHI - 682 018 R1-R3 BY SRI.THOMAS MATHEW NELLIMOOTTIL,SC,CB EX THIS CENTRAL EXICISE APPEAL HAVING COME UP FOR ADMISSION ON 24-09-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.E.Appeal.No. 7 of 2013 APPENDIX APPELLANT'S EXHIBITS: ANNEXURE 1 : TRUE COPY OF THE INCOME TAX RETURN FILED BY THE APPELLANT DURING THE YEAR 2007-08 DATED 31/07/2008. ANNEXURE 1(A) : TRUE COPY OF THE INCOME TAX RETURN FILED BY THE APPELLANT DURING THE YEAR 2008-09 DATED 04/05/2009. ANNEXURE 2 : TRUE COPY OF THE SHOW CAUSE NOTICE ISSUED TO THE APPELLANT BY THE SECOND RESPONDENT DATED 04/01/2011. ANNEXURE 3 : TRUE COPY OF THE AGREEMENT FOR SALE ENTERED INTO BETWEEN APPELLANT AND M/S.PURVANKARA PROJECTS LTD., DATED 16/02/2006. ANNEXURE 4: TRUE COPY OF THE REPLY SUBMITTED BY THE APPELLANT TO EXHIBIT P1 SHOW CAUSE NOTICE DATED 07/03/2011. ANNEXURE 5 : TRUE COPY OF THE ORDER PASSED BY THE THIRD RESPONDENT DATED 30/09/201. ANNEXURE 6 : TRUE COPY OF THE APPEAL PREFERRED BY THE APPELLANT BEFORE THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL BENCH, BANGALORE DATED 02.12.2011. ANNEXURE 7 : TRUE COPY OF THE APPLICATION FOR STAY FILED BY THE APPELLANT BEFORE THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH ZONAL BENCH, BANGALORE DATED 06/03/2012. /TRUE COPY/ PA TO JUDGE Manjula Chellur, C.J. & A.M. Shaffique, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - C.E. Appeal No. 7 OF 2013 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 24th day of September, 2013 JUDGMENT Manjula Chellur, C.J. Heard learned Senior Counsel Sri.P.B.Suresh Kumar appearing for the appellant. 2. The entire issue revolves around a direction issued by the Tribunal directing the appellant herein to deposit a sum of `13 lakhs within 8 weeks from the date of order i.e. 19.08.2013 and report compliance by 11.11.2013. The controversy is with regard to the service alleged to have been rendered by the appellant by receiving some amount from M/s.Puravankara Projects Limited and can such service be considered as service rendered by a real estate agent as per the definition of 'real estate agent' and under Section 65(88) of the Finance Act. The matter is pending before the Service Tax Appellate Tribunal so far as the demand made by the respondent Department alleging that the appellant herein has got money by rendering service as a real estate agent. 3. According to the appellant herein, on the face of it such opinion could not have been formed by the Department C.E.Appeal No.7 of 2013 -:2:- as appellant is neither a registered real estate agent nor deals with any property transaction and he is an hotelier. We need not entertain the controversy so far as the occupation or the profession carried on by the appellant as the said controversy has already been raised before the Tribunal. 4. We are only concerned with the challenge made by the appellant so far as the demand of 30 lakhs, which is 1/4 ₹ th of the demand of service tax by the Department. According to Senior Counsel appearing for the appellant, unlike any other enactments there is no conditional deposit to entertain the appeal. As against this the Standing Counsel for the Department contends that Section 35F of the Central Excise Act, 1944 clearly indicates that it is a condition but the concession could be only if valid reasons are shown and the Tribunal is satisfied as per the proviso to Section 35F. Section 35F reads as under: “35F. Deposit, pending appeal of duty demanded or penalty levied.- Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of central excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating C.E.Appeal No.7 of 2013 -:3:- authority the duty demanded or the penalty levied: Provided that where in any particular case, the Commissioner(Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue: Provided further that where an application is filed before the Commissioner(Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner(Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing. Explanation.- For the purposes of this section “duty demanded” shall include.- (i) amount determined under Section 11D; (ii) amount of erroneous CENVAT credit taken; (iii) amount payable under rule 57CC of Central Excise Rules, 1944; (iv) amount payable under rule 6 of CENVAT Credit Rules, 2001 or CENVAT Credit Rules, 2002 or CENVAT Credit Rules, 2004; (v) interest payable under the provisions of this Act or the rules made thereunder.” 5. On reading of the above provision it is clear that the person desirous of appealing against such decision or order C.E.Appeal No.7 of 2013 -:4:- of the respondent authority shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied. Only by way of the proviso the Tribunal could reduce the quantum of amount to be deposited, if it is satisfied. As a matter of fact, the total amount demanded by the Department is about 1 Crore 21 lakhs and the appellant is directed to deposit only ₹ 25% of the said demand. In that view of the matter, having regard to the proviso under Section 35F, we are of the opinion, the Tribunal was justified in imposing such a condition and no good grounds are made out to interfere with such direction of the Tribunal. Accordingly the appeal is dismissed. However, we direct the Tribunal to dispose of the appeal itself within three months from today. Manjula Chellur, Chief Justice. A.M. Shaffique, Judge. ttb/24/09 C.E.Appeal No.7 of 2013 -:5:- "