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Judgment
Both the appeals have been filed by the appellants u/s 35G of the Central Excise Act, 1944 against the consolidated order dated 17-9-2013 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi in ST/Stay/1072/2012; and ST/Stay/1069/2012 with a request to stay the demand made by the Central Excise & Service Department, Lucknow. Heard Sri Pradeep Agarwal, learned counsel for the appellants and Sri Rajesh Singh Chauhan, learned standing counsel for the Department.
With the consent of learned counsel for the parties, both the appeals are disposed of at the admission stage.
The brief facts of the case are that the both the appellants-assessees are sister concern and engaged in the services for providing "cash van" to different Banks and Financial Institutions. The Department has issued a notice and made the demand of Rs. 76,11,877/- (In Central Excise Appeal No. 26 of 2013); and a sum of Rs. 1,77,14,500/- (In Central Excise Appeal No. 27 of 2013) respectively. The case is pending before the Customs, Excise & Service Tax Appellate Tribunal, and New Delhi. Vide impugned common order dated 17-4-2013, passed by the Tribunal; the request for stay of the demand has been rejected. Being aggrieved, the present appeals have been filed.
It is the submission of Sri Pradeep Agarwal, learned counsel for the appellants that the services for providing the "cash van" for transportation of cash from one place to another of the Bank or Financial Institutions is outside the purview of the definition of ''service'' in terms of 65(105)(105)(W) of Finance Act, 1994 and as such no liability of tax as well as penalty can be fastened upon the assessee under the said Act. He also submits that the premises of the appellants were illegal searched and all the credit entries in the Bank Accounts were treated as the receipt for the services. Not only this, even the "cash van" provided by the appellants has also been included for levy of service tax. The Department has levied the penalty and interest illegally. He also submits that the security to the "cash van" is provided by the concerning Bank/Financial Institution.
Learned counsel states that the Tribunal has passed the order requiring the appellants to deposit the entire amount of the assessed tax. The learned Tribunal did not consider the financial conditions of the appellants as well as the fact that the entire adjudication is based on a search. The warrant of search was in the name of "Federal Security Pvt. Ltd." but the premises of the appellants were being searched. So, the entire levy of service tax including penalty is without authority of law. Lastly, he made a request to stay the demands in question.
On the other hand, Sri Rajesh Singh Chauhan, learned standing counsel for the Department has justified the demand raised by the Department. He submits that the service provided by the appellants is taxable and the appellants-assessees never deposited the tax. So, the search was rightly conducted at the business premises of the appellants. After the material so seized, the demands were raised by the Department. He also states that there is no hardship with the appellants.
After hearing both the parties and on perusal of the record, it appears that on 22-3-2011 and 25-3-2011, search and seizure operation was conducted at the business premises of the appellants.
From the records, it appears that by impugned order, the Tribunal has rejected the request for the stay of the demand. The Tribunal observed in its impugned order dated 17-9-2013 in Para-3 as under :-
At this stage of the proceedings we are therefore not in a position to ascertain whether there is any infirmity in the impugned adjudication order only on the account of the fact...
From the above, it appears that the Tribunal was not sure pertaining to the fact that the services provided to the Bank and Financial Institutions is a taxable service or not. The Tribunal has touched the merit while adjudicating an application for stay of demand. As learned counsel for the appellants argued that there is financial crunch with the appellants, but the Tribunal has not considered this aspect.
In the instant case, it was submitted by the learned counsel that the opposite parties are going to close the business of the appellants. When it is so, then we are of the view that the tax can be collected like a honeybee but without damaging the flower. Hence, keeping in mind the ratio laid down in the case of Assistant Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. and Others, as well as in the case of Income Tax Officer Vs. M.K. Mohammed Kunhi, we are of the view that in the present appeals, stay can be granted as conditions mentioned in the above orders are, prima facie, applicable.
Therefore, we direct the appellants to deposit a sum of Rs. 25.00 lakhs in Central Excise Appeal No. 26 of 2013; and a sum of Rs. 50.00 lakhs in Central Excise Appeal No. 27 of 2013, within a period of two months with the Department. If total Rs. 75.00 lakhs is being deposited then the remaining demand shall be kept abeyance, till the disposal of the appeals by the Tribunal, which will have to be decided at the earliest. With the aforesaid directions, both the appeals are disposed of at the admission stage, as stated above.