THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE N.RAVI SHANKAR C.E.A.No. 110 of 2011. ORDER: (Per Goda Raghuram, J) Heard Sri.V.Gopalakrishna Ghokhale, learned Counsel for the appellant and Sri.T.Rajendra Prasad for the respondent. This appeal under Section 35-G of the Central Excise Act, 1944 is presented against the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (for short ‘the Tribunal’) dt. 18.4.2011 whereby the application of the respondent bearing No. ST/St/478/09 was allowed and waiver of pre-deposit granted. The substantive appeal presented before the Tribunal by the respondent pertains to its liability to service tax and penalty as determined in Original Order No. 12/2009-S.Tax (Commn’r) dt. 11.6.2009 passed by the Commissioner of Customs, Central Excise and Service Tax, Guntur. By the said order, the Primary Authority determined the service tax liability at Rs. 85,87,52,520/-; and education cess at Rs. 1,50,82,356/-, in all Rs. 87,38,34,876/-pertaining to the service provided by the respondent for the years 2003-04 to 2005-06, under the proviso to Section 73 (1) of the Finance Act as amended from time to time, on the service of “Commercial training or coaching” provided by the respondent, chargeable under Sections 66, 67 and 68 of the Finance Act, 1994 as amended. The Primary Authority imposed a penalty of Rs. 150 (one hundred and fifty only) crores in addition to other penalties, mention of which may not be necessary having regard to the issues involved in this appeal and since these are relatively insignificant in nature. Against the determination of service tax liability and imposition of penalty by the Primary Authority, the respondent preferred an appeal to the Tribunal under Section 86. Section 83 of the Service Tax Act enjoins that provisions of Section 35-F of the Central Excise Act 1944 as amended from time to time shall apply to the orders of service tax as they apply in relation to a duty of excise. Section 35-F of the Central Excise Act 1944 reads as under: Section 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 demand 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 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. Primarily therefore the requirement of pre-deposit of the service tax liability determined and the penalty levied by the primary assessment order dt. 11.6.2009 is a condition precedent for entertainment of the respondent’s appeal by the Tribunal. Proviso to Section 35-F of the 1944 Act however enables the Appellate Tribunal, to dispense with the requirement of pre-deposit subject to such conditions as may be imposed to safeguard the interest of the revenue, where a satisfaction is recorded that deposit of the duty demanded or the penalty levied would cause undue hardship to the appellant (in this case the respondent herein). Earlier on 14.6.2010, the Tribunal entertained and allowed the respondent’s application for waiver of pre-deposit and interdicted recovery of service tax. Aggrieved, the Revenue preferred C.E.A.No. 301 of 2010 which was allowed by a learned Division Bench of this Court dt. 19.1.2011. In allowing the appeal by the Revenue, this Court held that the order of Tribunal was not in accordance with the law declared by the Supreme Court and the Tribunal failed to focus its consideration on prima facie case and balance of convenience and irreparable loss and that the Tribunal did not consider the aspect of undue hardship which must exist for exercising power under Section 35-F of the 1944 Act and even assuming that there was hardship, the Tribunal ought not to have granted the order of stay by dispensing with the pre-deposit without imposing any conditions. This Court also ruled that the order of the Tribunal cannot be sustained, despite the offer of the assessee to deposit 5.00 crores as a pre-condition for continuing the stay. Eventually, the matter was remanded to the Tribunal for a de novo consideration in the light of the principles contouring to the exercise of discretion to grant stay, set out in the Judgement in C.E.A.No. 301 of 2010. After the de novo exercise, on remand by this Court, the Tribunal passed the impugned order dt. 18.4.2011 again granting blanket waiver of pre-deposit. The Tribunal recorded reasons for doing so as under: Be that as it may, we find that the appellant herein had failed to bring to the notice of the Hon’ble High Court or before us when the matter was first heard, as regards the attachment of the property by the lower authorities vide their attachment letter dt. 4.3.2009. It is also seen from the attachment order that the property which has been attached is immovable property and is in the form of land and the value, as worked out by the lower authorities or the authorities by whom the property attached, is approximately Rs. 27.00 crores as on that date. In our view, the property which has been attached by the lower authorities can be considered as enough security to safeguard the interest of the Revenue. Since we have come to a conclusion that during the relevant period, the appellant could have entertained a view that he is not liable to discharge service tax on ‘commercial or coaching centre’ being a charitable institution, and also keeping in mind the direction of the Hon’ble High Court and the fact that the lower authorities have attached property worth Rs. 27 crores and the said attachment has been extended till 3.9.2011, we find that the interest of the Revenue is secured. In view forgoing, we allow the application for waiver of pre-deposit of the balance amounts involved and stay recovery thereof till the disposal of the appeal. The learned Tribunal appears to have been persuaded to the view that the appellant could have entertained a view that he is not liable to discharge service tax on ‘commercial or coaching centre’ being a charitable institution, and also keeping in mind the direction of the Hon’ble High Court and the fact that the lower authorities have attached property worth Rs. 27 crores and the said attachment has been extended till 3.9.2011. Section 73-C (Chapter-V of the Finance Act, 1994 as amended from time to time) enables provisional attachment of assets in certain cases pending proceedings under Sections 73 and 73-A and where the Central Excise is of the opinion that for the purpose of protecting the interest of the revenue, it is necessary to attach the property without previous approval of the Commissioner of Central Excise. Sub-section (2) of Section 73-C enjoins that such provisional attachment shall cease after expiry of a period of six months from the orders made under Sub- section (1). Section 73-C empowers the Chief Commissioner of Central Excise, for reasons to be recorded to extend the aforesaid period by such further period or periods of six months, so however that the total period of extension shall not in any case exceed two years. The attachment of the assets of the respondent in this case was ordered on 4.3.2009. In view of the provisions of Section 73-C attachment would, even by the exercise of power conferred on the Chief Commissioner of Central Excise, come to an end by 3rd September, 2011, as observed by the Tribunal in its order at para-12. As on date therefore there is no operative attachment of the respondent’s assets in relation to its liability for tax and penalty as determined by the order of the Primary Authority dt. 11.6.2009 and therefore there appears no safeguard for the interest of revenue. The consideration that there was an attachment of the property worth Rs. 27 crores which was in operation may have been presumptively relevant as on the date of the order of the Tribunal dt. 18.4.2011. Since the determination of service tax and penalty is asserted at Rs. 87,38,34,876/- and having regard to the fact that the interest of the revenue as well as the component of undue hardship to the respondent must be balanced, we are persuaded to the view that the order of the Tribunal granting blanket waiver of pre-deposit ex facie constitutes a clear erroneous exercise of discretion, warranting interference in this appeal under Section 35-G of the 1944 Act. Sri. Gopalakrishna Gokhale, learned Counsel for the appellant would submit that the interest of the revenue would be safeguarded while balancing the interest of the respondent/assessee if it is directed that 50% of the tax liability, as determined in Original Order No. 12/2009- S.Tax (Commn’r) dt. 11.6.2009, is directed to be deposited under Section 35-F of the 1944 Act. Sri. Rajendra Prasad, the learned Counsel for the respondent would submit that having regard to the huge quantum of service tax and penalty determined, it would be impossible for the assessee to deposit 50% of the amount and the respondent being an institution running educational institutions would face the prospectus of closure of those institutions collaterally impacting the students’ studies as well. The Counsel for the respective parties have also presented competing contentions on the service tax liability of the respondent. We however decline to record those contentions or the consequences thereon since the substantive appeal of the respondent against the order of the Primary Authority is potentially pending adjudication before the Tribunal. Suffice it to record that in view of the explanation to Section 65 (105) (zzc), the expression ‘commercial training or coaching centre’ occurring in this sub-clause and in clauses (26) (27) and (90a) shall include any centre or institute, by whatever name called, where training or coaching is imparted for consideration, whether or not such centre or institute is registered as a trust or a society or similar other organisation under any law for the time being in force and carrying on its activity with or without profit motive and the expression ‘commercial training or coaching centre’ shall be construed accordingly. Having carefully considered the competing interests of the Revenue and the hardship that is likely to be occasioned to the respondent/assessee in case the entire amount of service tax and penalty as determined by the Primary Authority by the order dt. 11.6.2009 is directed to be deposited, we direct that the respondent shall deposit 1/3rd of the amount of service tax and penalty, which comes about Rs. 80.00 crores as pre-deposit under Section 35-F of the 1944 Act in its appeal preferred under Section 86 of the Service Tax Act. On such deposit, the Tribunal shall entertain the appeal of the respondent preferred against the order of the Commissioner, Customs, Excise and Service Tax, Guntur, dt. 11.6.2009 The learned Counsel for the respondent would contend that the attachment of property of the respondent for recovery of service tax by the Revenue is barred by limitation and in support of this contention he relied on the Judgement of a learned Division Bench of Bombay High Court in Bajaj Auto Limited vs. Union of India[1]. Since the question of limitation is a question of fact under appropriate law, it is always open to the respondent to urge the point of limitation before the Tribunal in its appeal. The appeal is allowed as above. There shall be no order as to costs. _____________________ GODA RAGHURAM, _____________________ N.RAVI SHANKAR, J 19.10.2011. KRB. THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE N.RAVI SHANKAR C.E.A.No. 110 of 2011. ORDER: (Per Goda Raghuram, J) Dt. 19.10.2011. [1] 2003 ELT 151-23