2015 (9) TMI 938 - HC - Service Tax

Condonation of delay - Disallowance of Cenvat credit - Penalty u/s 11AC - Held that - Limitation expired on 29-6-2010. Therefore, the appeal filed by the appellant is delayed by a period of six months. The Tribunal has powers under Section 35B of the Central Excise Act, 1944 to condone the delay if it is satisfied that there was sufficient cause for not presenting it within that period . The cause shown by the appellant for moving an application belatedly was that the order dated 29-1-2010 passed by the adjudicating authority was not communicated to the authorized person. This aspect has not been dealt with by the Tribunal while passing the order under challenge.- delay condonation application should have been allowed, considering the facts and circumstances of the case, including the fact that the appellant is public sector undertaking of the Central Government. Consequently all the substantial questions of law are decided in favour of the present appellant-Bharat Sanchar Nigam Limited. - matter restored before the Tribunal - Decided in favour of assessee.

Summary

Issues:
1. Dismissal of delay condonation application by the Tribunal.
2. Justification of allowing the delay condonation application under Section 35B(5) of the Central Excise Act, 1944.
3. Compliance of Rule 35 of Custom Excise & Gold (Control) Appellate Tribunal (Procedure) Rules, 1982.

Analysis:

Issue 1: Dismissal of Delay Condonation Application
The appellant's delay condonation application was dismissed by the Custom, Excise & Service Tax Appellate Tribunal on the grounds that the delay was not satisfactorily explained. The Tribunal has the authority under Section 35B of the Central Excise Act, 1944 to condone the delay if there was a sufficient cause for not presenting the appeal within the statutory period. The appellant argued that the delay was due to the non-communication of the adjudication order by the authorized person. However, the Tribunal did not address this aspect in its decision, leading to a lack of consideration of a crucial factor in the delay.

Issue 2: Justification of Allowing Delay Condonation Application
The High Court opined that the delay condonation application should have been allowed based on the facts and circumstances of the case. The appellant, being a public sector undertaking of the Central Government, was a significant factor in favor of allowing the application. The Court emphasized that rules of procedure are meant to serve substantial justice, and in this case, allowing the delay condonation application was deemed necessary to uphold justice. The Court referred to previous decisions by the Honorable Apex Court, highlighting the importance of procedural rules in achieving substantial justice.

Issue 3: Compliance with Rule 35 of Custom Excise & Gold (Control) Appellate Tribunal (Procedure) Rules, 1982
The Court did not delve into a detailed analysis of the compliance of Rule 35 of the mentioned Tribunal Rules. However, the decision to allow the appeal and direct the authority concerned to adjudicate the matter on its merits in accordance with the law implies a tacit acceptance of the compliance with procedural rules by the Appellate Tribunal. The focus of the judgment was primarily on the justification of allowing the delay condonation application and ensuring substantial justice for the appellant, rather than delving into the technicalities of procedural compliance.

In conclusion, the High Court allowed the appeal, directing the authority concerned to adjudicate the matter on its merits. The judgment emphasized the importance of considering the facts and circumstances of the case, especially when dealing with delay condonation applications, and highlighted the overarching principle of procedural rules serving the cause of substantial justice.