Once the realization of the principal liability was stayed and condition of pre-deposit was waived off,
The question that arose in the present appeal before the High Court was that once the pre-deposit of the principal liability having been stayed by the Tribunal, should the Tribunal also have not waived off consequential interest?
The Tribunal while deciding the issue regarding the pre-deposit noticed that there was a prima facie case though not a strong prima facie case and after delving into the issue had waived the pre-deposit and stayed all further proceedings for realization of the adjudicated liability in terms of the impugned order. However, the element of interest which was consequential to the adjudicated liability was ordered to be paid on the service tax assessed.
The Court held that once the realization of the principal liability was stayed and condition of pre-deposit was waived off, it would not be proper to direct that the entire interest component on the service tax assessed be deposited as a condition precedent for hearing of the appeal and accordingly it was held so.
[M/s Punjab Chemicals & Crop Protection Ltd. vs. CCE, Chandigarh-II]
(P&H HC, 20.05.2014)