CWP No. 17030 of 2011 -1- IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH CWP No. 17030 of 2011 Date of Decision: 7.12.2011 Pathankot Vehicleades Pvt. Ltd. ...Petitioner Versus Union Bank of India and others ..Respondents CORAM: Hon'ble Mr. Justice Hemant Gupta Hon'ble Mr. Justice G.S. Sandhawalia Present: Mr. M.P.Devnath, Advocate for the petitioners. Mr. R.S.Ghuman, Advocate for the respondents. Hemant Gupta, J. Challenge in the present writ petition is to the order Annexure P-1 dated 8.8.2011 passed by the Commissioner (Appeals) Customs and Central Excise, Chandigarh on an application under Section 35F of the Central Excise Act, 1944 seeking complete waiver of pre deposit of penalties. The petitioner is a dealer of the Maruti Suzuki Limited. The petitioner receives commission on account of incentives on achieving the sale targets fixed by Maruti Suzuki. The incentives received by the petitioner are said to be covered under “Business Auxiliary Services”, as defined under Section 65(19) and made taxable under Section 65(105) (zzb) of the Finance Act, 1994. Since the petitioner had not paid service tax on the said incentives, the Adjudicating Authority made petitioner liable to pay service tax amounting to Rs.42,02,924/- under Section 73 of the Act and imposed penalty of the equivalent amount under Section 76 and under Section 78 of the Act apart from the penalties under Section 77 of the Act. CWP No. 17030 of 2011 -2- Aggrieved against the order of Adjudicating authority, the petitioner filed an appeal before the Commissioner (Appeals) Customs and Central Excise, Chandigarh and also sought waiver of pre-deposit in an application under Section 35F of the Act. The learned Commissioner (Appeals) directed the petitioner to pay Rs.21 lacs towards service tax and waived off full requirement of pre deposit of service tax and penalties imposed under the impugned order. Learned counsel for the petitioner has vehemently argued that the issue whether the sale incentive falls within service “Business Auxiliary Services” is a question which has arisen before different Tribunals throughout the country and the Tribunals in some cases have passed order of full waiver of pre deposit. Therefore, there should be complete waiver of the service tax and penalties. The question whether the petitioner is providing services chargeable to tax under the head “Business Auxiliary Services” is a debatable question. It is dependent upon the nature of service provided. Prima facie, we find that the deposit of Rs.21 lacs as a condition precedent before entertaining the appeal seems to be harsh. Keeping in view the facts and circumstances of the case, we order that the ends of justice would meet if the petitioner deposits Rs.10 lacs within two months instead of Rs.21 lacs in terms of the order by the Commissioner(Appeals) before the appeal is heard by the Commissioner (Appeals). The writ petition stands disposed of. ( Hemant Gupta ) Judge (G.S. Sandhawalia) 7.12.2011 Judge Meenu