MUHAVRA ENTERPRISES PRIVATE LIMITED vs COMMISSIONER OF CGST & CENTRAL TAX-DELHI SOUTH

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL


NEW DELHI

PRINCIPAL BENCH – COURT NO. – IV

Service Tax Appeal No. 52080 of 2024

[Arising out of Order-in-Appeal No. 32/2023-24 dated 22.11.2023 passed by the
Commissioner of Central Tax (Appeals-II), Delhi]

M/s. Muhavra Enterprises Private Limited …Appellant
Khasra 258, Lane No.3,
Westend Marg, Saidulajab,
Saket, New Delhi - 110030

VERSUS

Commissioner of CGST & Central Tax –
Delhi South …Respondent
UG Floor, EIL Annexe Building,
Bhikaji Cama Place, South Delhi - 110066

APPEARANCE:
None for the Appellant
Shri Anuj Kumar Neeraj, Authorized Representative for the Respondent

CORAM:
HON’BLE DR. RACHNA GUPTA, MEMBER (JUDICIAL)

DATE OF HEARING: 01.06.2026
DATE OF DECISION: 07.09.2026

FINAL ORDER NO. 51432/2026

DR. RACHNA GUPTA

Present appeal is filed to assail the Order-in-Appeal No.
32/2023-24 dated 22.11.2023. Briefly stated, M/s. Muhavra
Enterprises Pvt. Ltd., the appellant herein was registered with the
service tax department for providing taxable services including
Restaurant Service. During the scrutiny of financial records of the
appellant for the period 2015-16 to 2017-18 following discrepancies
were noticed:
(a) Availment of inadmissible Cenvat credit
(b) Reversal as per Rule 6(3) for exempted services
(c) Non-payment of service tax on miscellaneous income

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(d) Wrong availment of abatement on service charge charged
on invoices
(e) Trans-1 Verification
(f) Non-payment of late fees on late filing of ST-3 returns

1.1 Two of those discrepancies at point (e) and (f) above, were
accepted by the appellant and the applicable service tax was paid.
However, remaining four were contested. Not being satisfied with
the reply of the appellant that Demand-Cum-Show Cause Notice
No. 9/2021-22 dated 22.04.2021 was served upon the appellant
proposing reversal of Cenvat credit amounting to Rs.14,01,242/-.
The amount of Rs.30,266/- as was already deposited by the
appellant was proposed to be appropriated against the amount of
proposed reversal. Service Tax amounting to Rs.3,77,913/- was
proposed to be recovered along with the interest payable in terms
of Section 75 of the Finance Act, 1994. Penalty under Section
78(1) of the Finance Act, 1994 read with Rule 15(3) of the Cenvat
Credit Rules, 2004 was also proposed to be imposed. The proposal
was confirmed vide Order-in-Original No. 09/2022 dated
18.01.2023 except that the demand of Rs.3,42,786/- made for non-
granting of abatement on the amount charged as service charges in
the invoices, was dropped. In an appeal against the said order,
Commissioner (Appeals) vide the order under challenge has
dismissed the appeal for non-payment of the amount of pre-
deposit. Being aggrieved the appellant is before this Tribunal.
2. The appellant despite availing several opportunities and the
warning of the last opportunity, failed to appear on the date of
hearing i.e. 01.06.2026. Due to the reasons reflected in the order

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Service Tax Appeal No. 52080 of 2024

of the said date, the arguments on behalf of department were
heard.
3. Learned Departmental Representative submitted that the
appeal before Commissioner (Appeals) was rejected as ‘non-
entertainable’ for non-compliance of mandatory provision regarding
‘pre-deposit’ in terms of Section 35F of the Central Excise Act, 1944
read with Section 83 of the Finance Act, 1994. Apparently and
admittedly, the mandatory pre-deposit was not made at the time of
filing appeal before Commissioner (Appeals). Hence, there is no
infirmity in the order under challenge. With these submissions, the
appeal is prayed to be dismissed.
4. Having heard both the sides and perusing the entire records,
foremost we have perused Section 35F of the Central Excise Act,
1944 which reads as follows:

Section 35F. Deposit of certain percentage of duty demanded
or penalty imposed before filing appeal. -
The Tribunal or the Commissioner (Appeals) , as the case may be,
shall not entertain any appeal -
( i ) under sub-section (1) of section 35, unless the appellant has
deposited seven and a half per cent. of the duty, in case where duty
or duty and penalty are in dispute, or penalty, where such penalty is
in dispute, in pursuance of a decision or an order passed by an
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officer of Central Excise lower in rank than the [Principal
Commissioner of Central Excise or Commissioner of Central Excise ];
(ii) against the decision or order referred to in clause (a) of sub-
section (1) of section 35B, unless the appellant has deposited seven
and a half per cent. of the duty, in case where duty or duty and
penalty are in dispute, or penalty, where such penalty is in dispute,
in pursuance of the decision or order appealed against;
(iii) against the decision or order referred to in clause (b) of sub-
section (1) of section 35B, unless the appellant has deposited ten per
cent. of the duty, in case where duty or duty and penalty are in
dispute, or penalty, where such penalty is in dispute, in pursuance of
the decision or order appealed against:

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Service Tax Appeal No. 52080 of 2024

Provided that the amount required to be deposited under this
section shall not exceed rupees ten crores:
Provided further that the provisions of this section shall not apply to
the stay applications and appeals pending before any appellate
authority prior to the commencement of the Finance (No. 2) Act,
2014.
Explanation . - For the purposes of this section "duty demanded"
shall include, -
( i ) amount determined under section 11D;
(ii) amount of erroneous Cenvat credit taken;
(iii) amount payable under rule 6 of the Cenvat Credit Rules, 2001 or
the Cenvat Credit Rules, 2002 or the Cenvat Credit Rules, 2004.
Section is common with respect to appeals before
Commissioner (Appeals) and for the appeal before Tribunal. It
requires 7.5% of the amount of duty and penalty in dispute or
penalty where only penalty is in dispute to be deposited before
Commissioner (Appeals) and 2.5% to be deposited while filing the
appeal before this Tribunal.
5. It is coming out of the impugned order/Order-in-Appeal that
7.5% of the deposited amount was not deposited by the appellant
before Commissioner (Appeals). However, apparently and
admittedly the entire 10% of the disputed amount (7.5% + 2.5%)
stands deposited by the appellant vide two challans both dated
22.02.2024 (Rs.2,45,218 + Rs.66,135 stands deposited). Those
documents are held to be sufficient compliance of Section 35F of
the Central Excise Act, 1944. In such circumstances, denying any
opportunity to the appellant of representation/proper hearing vis-à-
vis merits of the case will amount to the violation of principles of
natural justice.
6. In light of the above observed circumstances, I hereby grant
one opportunity of representation to the appellant before

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Commissioner (Appeals) who shall give the findings vis-à-vis the
merits of the appeal.
7. With these observations, we hereby remand the matter for de
novo adjudication on the merits of the appeal. Commissioner
(Appeals) is required to pass the order within three months of
receiving the copy of the present order after giving reasonable
opportunity of representation to the appellant. With these
observations and directions, present appeal is allowed by way of
remand.
[Order pronounced in the open court on 07.09.2026 ]





(DR. RACHNA GUPTA)
MEMBER (JUDICIAL)

HK