2012 (5) TMI 554 - AT - Central Excise

Denial of CENVAT Credit - contravention of Rule 9 of Cenvat Credit Rules, 2004 - Held that - it is apparent that as per Section 37C(1)(a), it was obligatory on the part of the Revenue either to tender a copy of the decision of the adjudicating authority to the assessee or to sent it by registered post with acknowledgement due to the assessee or its authorised agent. In this case, registered AD post mode was not adopted by the department for serving the appellant with copy of the order-in-original. There is no evidence on records to show that the copy of the order-in-original was physically tendered to the appellant or his authorised agent. Thus, in our considered view, it is clear case in which mandate of Section 37C(1)(a) have not been followed by the Revenue. As such, there can be no presumption of service of order-in-original sent to the appellant through speed post. That being the case, the order of the Commissioner (Appeals) which is based upon presumption of service of order sent by speed post cannot be sustained - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Cenvat credit disallowed on the grounds of contravention of Rule 9 of Cenvat Credit Rules, 2004.
- Dismissal of appeal on the basis of being time-barred due to late filing.
- Dispute regarding the method of service of the order-in-original to the appellant.

Analysis:
1. The appellant, engaged in the manufacture of excisable items, had Cenvat credit disallowed due to alleged contravention of Rule 9 of Cenvat Credit Rules, 2004. A demand of Rs. 46,12,692/- was raised for the period 2005-06 and 2006-07. The adjudicating authority disallowed the credit and imposed a penalty under Rule 15 of Cenvat Credit Rules, 2004 along with interest.

2. The appellant filed an appeal against the order-in-original after the period of limitation had expired. The Commissioner (Appeals) dismissed the appeal, citing that the order-in-original was served on the correct address by speed post, making the appeal time-barred. The appellant argued that the order was not served as per Section 37C(1) of the Central Excise Act, 1944, which mandates specific modes of service.

3. The appellant contended that the department did not comply with the legal obligation to serve the order-in-original as per Section 37C of the Central Excise Act, 1944. The Bombay High Court's judgment emphasized the necessity of complying with the prescribed methods of service, such as sending the order by registered post with acknowledgment due. Since the department did not follow these procedures, there was no presumption of service through speed post.

4. The Tribunal observed that the Revenue failed to follow the mandatory requirement of tendering a copy of the decision to the assessee or sending it by registered post with acknowledgment due. As the department did not adopt the registered AD post mode for serving the appellant with the order-in-original, and there was no evidence of physical tendering, the presumption of service through speed post was unfounded. Consequently, the appeal was accepted, and the matter was remanded back to the Commissioner (Appeals) for a decision in accordance with the law.

5. In conclusion, the appeal was allowed, and the issue of service of the order-in-original was crucial in determining the timeliness of the appeal. The Tribunal emphasized the importance of following the prescribed methods of service as per the Central Excise Act to ensure proper compliance and avoid technical grounds for dismissal.