2011 (4) TMI 61 - HC - Central Excise

Delay in appeal before Commissioner (Appeals) - date of service of an order against which appeal sought to be filed - the decision order summons or notice shall be deemed to have been served if it has been served in the manner as set out in sub-section (1) of Section 37-C of the Act. In the instant case the stand of the Department is that the order-in-original was served in the manner set out in Section 37-C (1) (a) of the Act by tendering the decision order summons or notice. Earlier it was sought to be sent by Registered Post at the Factory premises of the appellant. The record shows that it could not be served as it was returned with the postal endorsement as the Factory closed . when the matter arises as to the right of a party in the form of extinguishment of remedy of an appeal then such provision though procedural must be strictly construed or in other words the strict mandate of the language of the Section must be complied with. Furthermore between taking a view which permits a party to pursue his remedy and which defeats the right to such remedy the law must lean in favour of the person who comes to the Court to pursue his remedy rather than the person seeking to defeat the remedy on technicalities. The Commissioner (Appeals) and the learned Tribunal misdirected themselves on the issue of recording a finding as to the date of service of the order-in-original on the appellant herein. - Matter restored to commissioner (appeals).

Summary

Issues:
Appeal against order dismissing appeal beyond limitation period, service of order-in-original, interpretation of Section 37-C of Central Excise Act, 1944.

Analysis:
1. The appellant appealed against the Tribunal's decision upholding the dismissal of their appeal by the Commissioner Central Excise (Appeals) due to being filed beyond the prescribed period of limitation. The Tribunal held that the respondent proved the service of the original order on the appellant on 25.02.2009 based on an entry in the department employee's diary. The appellant argued that the order served was not the relevant one, as per the numbering, and the Tribunal's finding was perverse and contrary to the record. The issue raised was whether the Tribunal considered Section 37-C of the Central Excise Act, 1944, regarding the service of the order.

2. The appellant contended that the Tribunal did not consider the relevant aspect of the order-in-original's service and the requirements of Section 37-C of the Act. Section 37-C outlines the methods of service, including personal delivery, registered post, or affixing a copy at the premises. The appellant questioned if the department followed the prescribed service method and proved due service as per the provision. The appeal was admitted based on substantial questions of law related to the Tribunal's jurisdiction in considering Section 37-C before determining the service date and the department's obligation to serve the order as per the Act.

3. The Court examined Section 37-C, emphasizing that service must adhere to the methods outlined in the Act. The Department claimed to have served the order by tendering it, following a failed attempt via Registered Post due to the factory closure. Both the Commissioner (Appeals) and the Tribunal assumed personal service based on employee entries but lacked proof of service. The Court questioned the test to be applied when conflicting versions exist between the Department and the Assessee regarding service without documentary evidence.

4. Despite the Department's claim of serving the order, discrepancies in the order number and lack of explanation raised doubts. The Court highlighted the importance of strict compliance with procedural requirements, especially in cases affecting appeal remedies. Emphasizing the need to interpret procedural provisions strictly when extinguishing appeal rights, the Court leaned in favor of the party seeking remedy over technicalities favoring remedy denial. The Court concluded that the Tribunal erred in determining the service date, setting aside the impugned orders and directing the Commissioner (Appeals) to hear the appeal on merit.

5. The Court answered the substantial questions of law affirmatively, emphasizing the importance of strict compliance with procedural mandates in service of orders. The appeal was disposed of in favor of the appellant, highlighting the need for proper consideration of service requirements under Section 37-C for upholding appeal rights.