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Judgment
Rule returnable forthwith. Heard finally by consent of parties.
We find that even the Tribunal while rejecting the claim of dispensing with the entire amount of pre-deposit, has found that for the purpose of levying service tax, cost of raw materials, packing materials, overheads and profit of the company, should not have been taken into consideration. Prima facie it appears that in view of the judgment of the Supreme Court in the case of "Bharat Sanchar Nigam Ltd. v. Union of India 2006 (2) S.T.R. 161 (S.C.)", the petitioner may not be liable to pay service tax.
The learned Counsel appearing for petitioner has agreed to give bank guarantee of the amount of Rs. 25 lakhs.
After having heard the learned Counsel appearing for respondents, in our opinion, the following order would meet the ends of justice:
(i) The order dated 23-7-2008 which is impugned in the petition is modified to the following extent:
(ii) On the petitioner submitting bank guarantee in the amount of Rs. 25 lakhs of a nationalised bank to the satisfaction of the Commissioner-respondent No. 2, the Tribunal shall hear the appeal of the petitioner on merit and shall dispose it of, in accordance with law, as expeditious as possible in any case within six months from the date on which writ of this order is served on the Tribunal.
(iii) The tribunal while disposing of the appeal shall make appropriate order in relation to the bank guarantee.
(iv) Rule is made absolute accordingly.
(v) No order as to costs.