2016 (11) TMI 111 - HC - Service Tax

Filing an appeal before Commissioner (Appeals) - Period of limitation - Section 85 of the Act - Held that - The Commissioner (Appeals), therefore, apparently committed an illegality in calculating the period of three months from the date of dispatch of order instead of from the date of its receipt by the appellant and dismissing the appeal on the ground of limitation. Likewise, Commissioner (Appeals) also committed an illegality in dismissing the appeal merely because verification of appeal in the office of the appellant was not properly done. In all fairness, Commissioner (Appeals) should have given an opportunity to the appellant to remove the defect. Appeal allowed - demand not justified - matter remanded.

Summary

Issues:
Appeal under Section 35G of the Central Excise Act, 1944 against the order passed by the Customs, Excise & Service Tax Appellate Tribunal, Kolkata affirming the order of the Commissioner (Appeals) - Determination of whether the appeal was filed within the prescribed period of limitation under Section 85 of the Act.

Analysis:
The appellant, a Public Sector Enterprise, received a show-cause notice alleging violation of Section 68 of the Finance Act, 1994. The adjudicating authority affirmed the demand of service tax, education cess, and penalties, which the appellant challenged through appeals. The Commissioner (Appeals) dismissed the appeal as being barred by limitation and due to a verification defect. The appellant then appealed to the Customs, Excise & Service Tax Appellate Tribunal, Kolkata, which also dismissed the appeal. The main issue was whether the appeal was filed within the prescribed time limit under Section 85 of the Act.

The relevant provision of Section 85 of the Act mandates that an appeal must be presented within three months from the date of receipt of the decision or order of the adjudicating authority, not from the date of dispatch. The appellant claimed they received the certified copy of the order on 28.02.2011 and filed the appeal on 27.05.2011, within the three-month period. The respondent failed to provide proof of the order's receipt by the appellant. The court held that the Commissioner (Appeals) erred in calculating the period from the dispatch date and in dismissing the appeal due to a verification defect without allowing the appellant to rectify it. Consequently, the orders of the Commissioner (Appeals) and the Customs, Excise & Service Tax Appellate Tribunal were set aside, and the matter was remanded to the Commissioner (Appeals) for a decision on merit.

In conclusion, the High Court allowed the appeal, emphasizing the importance of adhering to the prescribed time limit for filing appeals under Section 85 of the Act and ensuring procedural fairness in appeal processes by providing opportunities to rectify defects before dismissal.