2016 (3) TMI 405 - HC - Service Tax

Condonation of delay - CESTAT dismissed the appeal, as barred by limitation - delay of almost 2 years - Held that - The reasons for seeking condonation of delay is only one singular reason which has been stated in the affidavit that the appellant was under bonafide belief that TTD would discharge their liability with respect of service tax. Inasmuch as the appellant was under the impression that the service tax is only a pass-through and payable by TTD, they did not file any appeal. Though the taxable turnover so far as the service tax is concerned, is alleged to be only about 70 lakhs notwithstanding the total turnover of ₹ 4.70 crores, we are of the opinion that the reasons stated in the delay condonation petition are not fully satisfactory. However, we also notice that the order in Original was passed on 30.11.2012. Even as on today, no steps were taken by the department in collecting the tax amount, which has been demanded by the order dated 30.11.2012. Assuming the delay is caused in asserting the right by the appellant, there is also lapse on the part of the department in not enforcing the order which has been passed on 30.11.2012 even after expiry of the appeal time under the Statute - Delay condoned subject to conditions.

Summary

Issues Involved:
Challenge to the order of Customs Excise and Service Tax Appellate Tribunal on the condonation of delay petition and appeal dismissal.

Analysis:

Issue (a):
The appellant challenges the dismissal of the delay condonation petition by the CESTAT, arguing that the delay of almost 2 years was beyond their control and provided plausible reasons for it. The appellant contends that the dismissal was unjustified despite specific, bonafide reasons stated.

Issue (b):
The tribunal's decision to dismiss the appeal based on the appellant's alleged awareness of tax deposit requirements is questioned. The appellant, claiming illiteracy and lack of knowledge about tax provisions, argues that they were under the impression that the tax would be reimbursed by TTD, leading to non-compliance.

Issue (c):
The appellant contests the tribunal's view on their diligence, arguing that their belief in TTD reimbursing the tax led to non-payment. The appellant emphasizes that the reliance on TTD's assurance impacted their actions regarding tax liability.

Issue (d):
The tribunal's dismissal of the appeal due to non-payment of tax and the nature of works executed is challenged. The appellant raises concerns about the tax eligibility, turnover computation, and relevance of memos in the appeal grounds, urging a review of these aspects.

Issue (e):
The appellant argues that the tribunal's refusal to condone the delay was harsh and contrary to legal provisions. They highlight that the levy's jurisdictional issues should have been considered, citing legal precedents to support their contention that delay should not affect substantive issues.

The appellant's counsel presents the appellant's engagement in civil works for TTD, emphasizing the belief that TTD would discharge the service tax liability. The appellant, along with other contractors, did not approach the appellate forum due to this belief, leading to the delay in addressing the tax issue. The appellant stresses the potential irreparable loss if the delay is not condoned, urging leniency from the appellate tribunal.

The respondent opposes the appeal's consideration, arguing that the appellant's inaction led to the dismissal of the appeal rightfully. The respondent contends that the tribunal's decision on delay condonation is valid and requests the appeal's dismissal.

Upon reviewing the submissions, the court acknowledges the appellant's belief regarding TTD's liability discharge but finds the reasons for delay unsatisfactory. However, the court notes the department's inaction in collecting the tax demanded since 2012. Considering the potential prejudice to the appellant if the appeal is not heard on merits, the court decides to take a lenient view. The court orders the appellant to deposit a specified amount, restores the appeal, and directs the tribunal to expedite the appeal's disposal within three months.

In conclusion, the Central Excise Appeal is allowed, and any pending miscellaneous petitions are closed accordingly.