2016 (6) TMI 1002 - HC - Service Tax

Delay in filing of an appeal before the Commissioner of Central Excise (Appeals) - Condonation of delay - Order impugned before the appellate authority is dated 09.03.2012. Appeal has been filed on 14.08.2012. Admittedly, it is within the extended period of limitation - Held that - When the Hon ble Supreme Court has described the manner of disposal of an appeal, as illegality, the same can be corrected by this Court, in exercise of the powers under Article 226 of the Constitution of India and no useful purpose would be served in relegating the appellants to approach the alternative remedy. Courts have held that a writ petition is maintainable, when the act committed is per se illegal, and contrary to the statute. The Commissioner of Service Tax (Appeals) is directed to take the appeal and decide the same, on merits, without being influenced by any of the observations or discussions in the earlier order, dated 30.11.2015, as it has been now set aside by this Court. - Appeal restored before the First appellate authority.

Issues Involved:
1. Calculation of the period of limitation for filing an appeal.
2. Justification for condonation of delay in filing the appeal.
3. Authority of the appellate body to re-examine the sufficiency of the cause for delay.
4. Legality of deciding the merits of a time-barred appeal.

Detailed Analysis:

1. Calculation of the Period of Limitation for Filing an Appeal:
The primary issue revolves around whether the period of limitation should be calculated based on the date of the impugned order or the date the appeal was preferred. The initial order of assessment was passed on 29.02.2012, and the appeal was filed on 14.08.2012. The court observed that the amendment reducing the period to file an appeal from three months to two months came into force on 28.05.2012. Therefore, the appellant's contention that the appeal should be considered under the pre-amendment period, which allowed three months for filing, was justified. The court held that the appeal was within the extended period of limitation and should not have been rejected on the ground of being time-barred.

2. Justification for Condonation of Delay in Filing the Appeal:
The appellant explained the delay of two months and seven days by stating that the original impugned order was referred to counsel, and the papers were misplaced by the junior counsel. The court noted that the reason for the delay was beyond the reasonable control of the appellant. However, the Commissioner of Service Tax (Appeals-II) rejected this explanation, stating that misplacement by an advocate is not a sufficient cause for condonation of delay, as law officers are expected to be vigilant.

3. Authority of the Appellate Body to Re-examine the Sufficiency of the Cause for Delay:
The court emphasized that when the Writ Court had already directed the Commissioner of Central Excise (Appeals) to register the appeal if it was otherwise in order, it was not open to the appellate authority to re-examine the sufficiency of the cause shown for the delay. The appellate authority's role was to register the appeal and decide it on merits, as per the Writ Court's clear direction. The appellate authority's action of revisiting the cause for delay and rejecting the appeal on these grounds was deemed improper.

4. Legality of Deciding the Merits of a Time-barred Appeal:
The court referred to the decision in State Bank of India v. B.S.Agricultural Industries, where the Supreme Court held that deciding the merits of a time-barred complaint is illegal. Similarly, in Commissioner of Customs, Central Excise & Service Tax v. M/s.Monsanto Manufacturer Pvt. Ltd., the Allahabad High Court ruled that the Tribunal should not delve into the merits if the appeal is time-barred. The appellate authority's action of dismissing the appeal as time-barred and simultaneously deciding on its merits was thus considered an illegality.

Conclusion:
The court concluded that the appellate authority should have complied with the Writ Court's direction to register the appeal and decide it on merits without revisiting the cause for delay. The appellate authority's decision to reject the appeal on the grounds of limitation and subsequently address the merits was improper. The court set aside the orders of the Writ Court and the Commissioner of Service Tax (Appeals-II), directing the Commissioner to decide the appeal on merits within three months, without further adjudication on the delay. The Writ Appeal was allowed, and the connected Miscellaneous Petition was closed.

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