2020 (12) TMI 1335 - AAAR - GST

Condonation of delay in filing appeal - time limitation - delayed filing of appeal under Section 100 (2) of the CGST Act - henna is classifiable under chapter 14 or 33 of GST Tariff or not - HELD THAT - The Appellant has filed appeal on line on 17.06.2020. The Appellant has deposited SGST fee of Rs. 10000/- on 15.06.2020 and CGST fee of Rs. 10000/- on 22.10.2020. On perusal of appeal filed on 17.06.2020, it was found that the appellant has not filed the appeal in prescribed format. The appellant further filed the appeal in prescribed format on 02.11.2020 - the date of filing of appeal is 02.11.2020 which is 63 days delay from the last date i.e 31.08.2020. Further, the Appellant has deposited CGST (appeal) fee of Rs. 10000/- on 22.10.2020. As per provisions, the authority has discretion to condone the delay for 30 days. As discussed, we hold that delay in filing of this appeal is beyond the discretionary power (30 days) provided to Appellate authority. Therefore, condonation application filed by the appellant is liable to be rejected. The non-payment of CGST fee and non-filing appeal in prescribed format are procedural lapses - the payment of appeal fee and filing of appeal in prescribed format is mandatory requirements as per provisions of Section 100 (3) of the CGST Act, 2017. Section 100 (3) of the CGST Act, 2017 stipulates that every appeal under this section shall be in such form, accompanied by such fee and verified in such manner as may be prescribed. The said rules do not provide any discretion in non- implementation. The appellant has relied upon on the decisions in CENTRAL INDIA TOBACCO PRODUCTS PVT. LTD. VERSUS COLLECTOR OF CENTRAL EXCISE 1987 (2) TMI 256 - CEGAT, NEW DELHI and UNION OF INDIA, DELHI VERSUS ROSHAN LAL AND ANR. 1967 (9) TMI 157 - DELHI HIGH COURT where the issue was related to non-payment of court fees, but in this case, issue is related to determination of date of filing of appeal also. In this case, part fee has been deposited on 15.06.2020 and second part fees have been deposited on 22.10.2020. In this case complete fee has been deposited and appeal in prescribed format has been filed after more than 30 days from the due date of filing of appeal. Therefore, these case laws are not squarely applicable in this case. When it has been held that delay in filing of appeal is beyond the discretionary power provided to Appellate authority, therefore, it is observed that discussing appeal on merit would not be relevant. The condonation application filed by the appellant is hereby rejected and appeal is also rejected

Summary

Issues Involved:
1. Classification of Henna/Mehendi powder under GST Tariff.
2. Delay in filing the appeal and condonation of delay.
3. Procedural compliance regarding the payment of appeal fees and filing in the prescribed format.

Detailed Analysis:

1. Classification of Henna/Mehendi Powder under GST Tariff:
The appellant, a manufacturer of hair dye powder, sought clarification on whether henna is classifiable under Chapter 14 or 33 of the GST Tariff. The Advance Ruling Authority (AAR) ruled that Mehendi/Henna powder falls under Chapter 33, attracting GST at 18%. The appellant contended that henna powder, being a vegetable product, should be classified under Chapter 14, which covers "vegetable products not elsewhere specified or included," and thus attract a lower GST rate of 5%. The appellant argued that henna powder is a natural product obtained by grinding henna leaves without any additional processing, and it is predominantly used for beautifying hands and feet, not as a hair dye. The appellant further cited historical classification under Chapter 14 and various legal precedents supporting their claim.

2. Delay in Filing the Appeal and Condonation of Delay:
The appellant received the Advance Ruling on 18.05.2020 and filed the appeal online on 17.06.2020, within the 30-day period stipulated under Section 100(2) of the CGST Act. However, due to technical issues, the appellant paid the SGST fee on 15.06.2020 but could not pay the CGST fee until 22.10.2020. The appeal in the prescribed format was filed on 02.11.2020. The Appellate Authority noted that the last date for filing the appeal was extended to 31.08.2020 due to COVID-19, but the complete appeal was filed beyond this date, resulting in a 63-day delay. The authority emphasized that they could only condone a delay of up to 30 days, and thus, the delay in this case was beyond their discretionary power.

3. Procedural Compliance Regarding Payment of Appeal Fees and Filing in Prescribed Format:
The appellant argued that the delay in paying the CGST fee and filing the appeal in the prescribed format were procedural lapses. The Appellate Authority, however, held that payment of the appeal fee and filing in the prescribed format are mandatory requirements under Section 100(3) of the CGST Act. The authority found no evidence that the appellant made efforts to resolve the technical issues promptly. The cited case laws regarding non-payment of court fees were deemed not applicable as they did not address the issue of late filing of appeals.

Conclusion:
The Appellate Authority rejected the condonation application and the appeal due to the delay in filing beyond the permissible limit and non-compliance with procedural requirements. Consequently, the authority did not discuss the merits of the appeal regarding the classification of henna powder.