2014 (11) TMI 539 - HC - Service Tax

Condonation of delay - Bar of limitation - Cargo Handling Service - Held that - appellant has shown sufficient reasons that their Chartered Accountant, Shri KC Jain, who appeared before the Commissioner (Appeals), Jaipur, I, Jaipur, had undergone heart surgery and was not attending his office regularly and even Ms. Iti, (CA) who was looking into the legal matters of the family also left her services and Mr. Ravi Khandelwal who was looking after the matter also met with major accident and he lost his legs which has to be considered on its face value and in our considered view there was reasonable justification offered by the appellant to meet out sufficient cause in seeking condonation of delay and merely because no documentary evidence was placed on record in support thereof the reason assigned could not have been brushed aside in totality in absence of their being any counter or objection raised by the department. Apart from it, the delay as such in no manner defeats the right of any third party and besides it, the service tax was introduced for the assessees who are carrying cargo handling service for the first time by inserting Clause 20 of Finance Act, w.e.f. 16.8.2002 and the period in question is 16.8.2002 to 30.6.2003 and the service tax and interest was deposited by the assessee indisputably before the show cause notice was served and short payment against service tax of only ₹ 181/- remain outstanding under the provisions of Sec.73 (1) of the Finance Act, 1994 and penalty u/s.76 & 78 of the Finance Act, 1944. appeal preferred by the appellant before the Tribunal deserves indulgence to be heard on merits - appeal restored before tribunal - Decided in favour of assessee.

Summary

Issues:
1. Appeal against order of Custom Excise, And Service Tax Appellate Tribunal dismissed as barred by limitation.
2. Allegation of short payment of service tax for Cargo Handling Service.
3. Challenge to penalties imposed under Sections 76 and 78 of the Finance Act, 1944.
4. Condonation of delay in filing appeal before the Tribunal.

Analysis:
1. The instant appeal challenged the Custom Excise, And Service Tax Appellate Tribunal's order dismissing the appeal as time-barred. The appellant, a registered firm under the Finance Act, 1944, was alleged to have provided "Cargo Handling Service." The dispute arose regarding the levy of service tax on this service. The Tribunal dismissed the appeal citing limitation issues, denying the appellant the right to be heard on merit. The High Court noted the necessity to examine the issue on merits, emphasizing the importance of sufficient cause for condonation of delay in filing the appeal.

2. The appellant was accused of short payment of service tax for the period 16.8.2002 to 30.6.2003. The appellant contended that they had already deposited the service tax dues and interest before the show cause notice was served. The Tribunal observed a short payment of service tax of &8377; 181/- along with penalties under Sections 76 and 78 of the Finance Act, 1944. The High Court acknowledged the need to address the appellant's grievance regarding the classification of transportation of goods under "cargo handling services," which was yet to be examined.

3. The penalties imposed under Sections 76 and 78 of the Finance Act, 1944 were challenged by the appellant. The adjudicating authority had imposed penalties for short payment of service tax and delayed deposition. The Commissioner Customs & Central Excise (Appeals-I), Jaipur upheld the penalties. The High Court considered the penalties in light of the appellant's submissions and the need for a detailed examination of the case on merits.

4. The appellant sought condonation of delay in filing the appeal before the Tribunal, citing reasons such as the health issues of their Chartered Accountant and a family member's accident. The Tribunal rejected the application for condonation of delay, leading to the dismissal of the appeal. The High Court, after evaluating the reasons provided by the appellant, found them to be sufficient cause for condonation of delay. The Court emphasized the importance of each case being examined on its own merit and the need for a justifiable reason to treat the delay as excusable.

In conclusion, the High Court allowed the appeal, quashing the Tribunal's order and reinstating the appeal for further processing. The Court directed the parties to appear before the Tribunal for further proceedings. The judgment highlighted the significance of examining issues on merits, justifying delay in filing appeals, and ensuring fair consideration of grievances in tax matters.