THE HON’BLE Mrs. JUSTICE T. MEENA KUMARI AND THE HON’BLE Ms JUSTICE G. ROHINI WRIT PETITION No.21633 of 2007 ORDER: (Per the Hon’ble Mrs. Justice T. Meena Kumari) This writ petition is filed seeking a writ of mandamus directing the 2nd respondent to restore the appeal filed on 7.2.2007, consider the same on merits, and pass orders. The petitioner-Gandhi and Gandhi, is a partnership firm registered under the Finance Act, 1994 under the category of “Chartered Accountants Service”. It was engaged by the Andhra Pradesh Central Power Distribution Company Limited (APCPDCL) for data processing, report generation, data validation, ledger printing and other incidental services. While so, the respondent-department had issued a letter dated 25.11.2005 alleging that the said services fall under “Business Auxiliary Service” and obtained information about the contract entered into between the petitioner and APCPDCL as well as the amount collected under the agreement. The petitioner by its reply dated 2.2.2006 submitted a detailed note on electricity consumer data processing of APCPDCL by Chartered Accountants/Computer Agencies. It further informed that the services rendered by the petitioner would fall under the Head “Information Technology Service” and would not be taxable under “Business Auxiliary Service” as the same has been expressly excluded from the ambit of the said services in terms of Section 65(19) of the Finance Act, 1994. When the matter stood thus, the 1st respondent issued a show cause notice on 24.2.2006 proposing to raise a demand of Rs.7,33,919/- towards service tax and Rs.8,146/- towards education cess. The petitioner by reply dated 10.4.2006 submitted that it provided Computerized data Processing Services and therefore the same would not be liable to service tax and it would not come under ‘Business Auxiliary Service’. The petitioner was also given an opportunity of personal hearing wherein it submitted a copy of the agreement entered with APCPDCL along with periodical bills raised for the service rendered as well as ST-3 copies to show payment of service tax on the chartered accountant’s service. Despite the same, the 1st respondent passed orders dated 17.11.2006 holding that the services rendered to APCPDCL are taxable and proposed levy of an amount of Rs.7,42,065 towards service tax and Rs.8,146/- towards education cess. Aggrieved by the said order, the petitioner filed an Appeal along with an application for stay before the Commissioner of Central Excise (Appeals). The Commissioner passed an order dated 21.5.2007 declining to grant stay and directing the petitioner to deposit the service tax amount as demanded in the order dated 17.11.2006. The petitioner being a small firm of Chartered Accountants, had arranged funds and deposited an amount of Rs.1,85,517/- which constituted 25% of the tax demanded. In the meantime, the 2nd respondent by order dated 29.09.2007 dismissed the Appeal on the ground that the petitioner had not paid full service tax amount. The respondents filed counter affidavit disputing the claim made by the petitioner that the services rendered by it are in the nature of Information Technology Services and not Business Auxiliary Service. It is stated that the use of computer in the services rendered by the petitioner is secondary and the primary activity rendered by the petitioner related to business work, which falls under the category of Business Auxiliary Service and therefore, the same is taxable. It is further stated that as per Section 35F of the Central Excise Act, 1994, the appeal filed by the petitioner is liable to be dismissed without any further notice in case it failed to comply with the pre-deposit of service tax amount demanded in the impugned order within the stipulated time and since the petitioner paid only 25% of the Service Tax and failed to comply with the order of the 2nd respondent, the Appeal was rightly dismissed. It is, however, stated by the learned counsel for the petitioner that the petitioner paid another sum of Rs.4,64,483/- by way of a Challan on 23.11.2007 through Indian Overseas Bank, Aadarshnagar Branch, towards arrears of service tax. Having heard the learned Counsel for the petitioner as well as Sri A. Rajashekar Reddy, learned Assistant Solicitor General, appearing for the respondents and in view of the fact that the petitioner paid another sum of Rs.4,64,483/- by way of a Challan on 23.11.2007 through Indian Overseas Bank, Aadarshnagar Branch, towards arrears of service tax, we are of the opinion that interest of justice would be adequately met if the 2nd respondent is directed to restore the Appeal filed by the petitioner on 7.2.2007. Accordingly, there shall be a direction to the 2nd respondent to restore the Appeal filed by the petitioner on 7.2.2007 and pass appropriate orders on merits in accordance with law after hearing all the parties concerned. The writ petition is accordingly disposed of. No costs. ________________________ T. MEENA KUMARI, J. Date: 21-01-2008 ______________ G. ROHINI, J. Kgr THE HON’BLE Mrs. JUSTICE T. MEENA KUMARI AND THE HON’BLE Ms JUSTICE G. ROHINI WRIT PETITION No.21633 of 2007 21st January, 2008. Between: Gandhi and Gandhi, A partnership firm, having its Office at 1002, Paigah Plaza, Basheerbagh, Hyderabad, represented by a partner – Mr. Ajay Gandhi. .. Petitioner. And Joint Commissioner, Hyderabad II Commissionerate, L.B. Stadium Road, Basheerbagh, Hyderabad and another. .. Respondents.