2019 (7) TMI 1538 - AT - Service Tax

Condonation of delay in filing appeal - Section 86(4) of the Finance Act, 1994 - admissibility of an appeal or permit the filing of a memorandum of cross-objection after the expiry of the period referred to in sub-section (3) or sub-section (4) - sufficient cause for delay or not - HELD THAT - The delay condonation application mentions that the Counsel engaged by the Applicant in 2017 did not pursue the matter effectively. The Applicant had obtained service tax registration under construction service and had undertaken many construction activity. It was also represented by many Counsel. It is, therefore, not possible to accept the contention of the learned Counsel for the applicant that as the Counsel did not pursue the matter effectively, cross-objection were not filed and it was only when a new Counsel was engaged in 2018, and advice was given to file cross-objections, that cross-objections were filed on 20 July, 2018 with a delay of 468 days. This inordinate delay of 468 days has not been explained to the satisfaction of the Tribunal. It is no doubt true that each day s delay has not to be explained, but at the same time an Applicant is required to satisfy the Tribunal that there was sufficient cause for not presenting the cross-objection within the stipulated period of 45 days. In the present case, we are more than satisfied that the Applicant has miserably failed to satisfy that there was sufficient cause in not filing the cross-objections within the stipulated period. Even otherwise, the delay in filing the cross-objection is inordinate and under Section 86(5) of the Act, the Appellate Tribunal can permit the filing of the cross-objection even after the expiry of 45 days, if it is satisfied that there was sufficient cause for not presenting them within that period. It has been found as a fact that the Applicant has been unable to satisfy the Tribunal that it was prevented by sufficient cause from preferring the Appeal within the stipulated period - There is no explanation for the delay from April, 2014 and the delay from 27 February, 2017 has also not been satisfactorily explained. The delay condonation Application is, accordingly, rejected. The Appeal may be listed for final hearing on 12 September, 2019.

Summary

Issues Involved:
1. Delay in filing the cross-appeal by the Applicant.
2. Application for condoning the delay of 468 days in filing the cross-objection.
3. Adequacy of the explanation provided for the delay.
4. Consideration of the Applicant's financial difficulties as a reason for the delay.
5. Legal precedents cited by both parties.

Detailed Analysis:

1. Delay in Filing the Cross-Appeal by the Applicant:
The Applicant, M/s C. P. Systems Pvt. Limited, filed a cross-appeal on 20 July 2018, with a significant delay of 468 days. The appeal was initially filed by the Department on 31 January 2014, challenging the order dated 27 September 2013, by the Commissioner of Service Tax, New Delhi, which partially granted relief to the Applicant. The Tribunal's Registry communicated this appeal to the Applicant on 19 March 2014 and again on 8 February 2017, informing them of the final hearing scheduled for 27 February 2017.

2. Application for Condoning the Delay of 468 Days in Filing the Cross-Objection:
The Applicant's application for condoning the delay highlighted several reasons for the delay, including financial distress since 2013, loss of key personnel, and disorganized records. The Applicant claimed that these circumstances prevented them from filing the cross-objection within the stipulated period of 45 days as mandated by Section 86(4) of the Finance Act, 1994.

3. Adequacy of the Explanation Provided for the Delay:
The Tribunal scrutinized the Applicant's explanation for the delay. The Applicant argued that the speed post dated 19 March 2014 was not received, and the delay should be calculated from the receipt of the second notice on 14 February 2017. However, the Tribunal noted that there was no specific denial of receipt of the first notice in the application. The Tribunal found no satisfactory explanation for the delay from April 2014 to 27 February 2017, and even the delay post the second notice was not sufficiently justified.

4. Consideration of the Applicant's Financial Difficulties as a Reason for the Delay:
The Applicant cited severe financial difficulties, including being declared a Non-Performing Asset (NPA) by their bank and ongoing negotiations for a one-time settlement. Despite these claims, the Tribunal noted that the Applicant was represented by multiple counsels across various hearings, indicating that the matter was being pursued, albeit ineffectively.

5. Legal Precedents Cited by Both Parties:
The Applicant's counsel referenced the Jharkhand High Court's decision in *Voltas Ltd. vs. Deputy Commr., C. Ex. Jamshedpur* and the Supreme Court's decision in *V. N. Bharat vs. Delhi Development Authority* to support their plea for a liberal approach in condoning the delay. The Tribunal, however, differentiated these cases from the present one, stating that the Applicant failed to provide a sufficient cause for the delay. The Tribunal emphasized that under Section 86(5) of the Act, the delay could only be condoned if the Applicant satisfactorily demonstrated a sufficient cause, which was not done in this case.

Conclusion:
The Tribunal concluded that the Applicant failed to satisfactorily explain the inordinate delay of 468 days in filing the cross-objection. Consequently, the application for condonation of delay was rejected, and as a result, the cross-objection was also dismissed. The appeal was scheduled for final hearing on 12 September 2019.