2017 (4) TMI 222 - HC - Central Excise

Maintainability of appeal - time bar - Held that - While entertainment of appeal beyond the period of limitation can t be allowed, the key question is the date of knowledge of the assessee. We find from the averments in ground A(2) of the appeal filed before the CESTAT that the order-in-original was never actually received by the assessee although the same may have been delivered to the security personnel, posted at the office gate - What is important to notice here is that neither the 1st Appellate Authority nor the CESTAT had considered the merit of the appeal and both were dismissed by considering it to be time-barred. Bearing in mind the statement made in ground A(2) of the memo of appeal, we hold that computation of limitation period made by the 1st Appellate Authority was erroneous - matter remanded to Commissioner (Appeals), for his decision on merit - appeal allowed by way of remand.

Issues: Appeal challenging dismissal of appeal as time-barred, Cenvat credit disallowed due to wilful misstatement and suppression of information, computation of limitation period, consideration of appeal on merit

Analysis:
1. Appeal challenging dismissal of appeal as time-barred:
The appeal was filed under Section 35G of the Central Excise Act, 1944, to challenge the decision dated 7-5-2015 by the Customs, Central Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, which dismissed the appeal and upheld the earlier order passed by the Commissioner (Appeals) on 30-11-2011. The 1st Appellate Authority had refused to consider the merit of the appeal, deeming it time-barred. The petitioner contended that they learned of the original order only upon receiving the demand notice on 8-12-2010, and subsequently filed the appeal within the prescribed period. However, the Appellate Authority considered the original order to have been delivered on 7-8-2010, leading to the appeal being declared time-barred.

2. Cenvat credit disallowed due to wilful misstatement and suppression of information:
The Addl. Commissioner of Central Excise, Guwahati, in the original order dated 30-7-2010, disallowed the Cenvat credit claimed by the petitioner, amounting to &8377; 17,26,595/- for the years 2003-04, 2004-05, and 2005-06. This disallowance was based on the grounds of wilful misstatement and suppression of material information by the assessee. The recovery of the claimed Cenvat credit was ordered under Section 11A(1) of the Central Excise Act read with Rule 14 of the Cenvat Credit Rules, 2004.

3. Computation of limitation period:
The key issue revolved around the computation of the limitation period for filing the appeal. The petitioner argued that they filed the appeal within the permissible period after learning of the original order. However, the Appellate Authority considered the appeal time-barred based on the date of delivery of the original order. The High Court noted that the order-in-original was never actually received by the assessee, although it might have been delivered to the security personnel. The Court highlighted that the appeal was filed ten days after the limitation period, possibly due to the non-delivery of the registered document.

4. Consideration of appeal on merit:
The High Court emphasized that while the entertainment of an appeal beyond the limitation period is not permissible, the crucial factor is the date of knowledge of the assessee. It was observed that neither the 1st Appellate Authority nor the CESTAT had considered the merit of the appeal, dismissing it solely on the grounds of being time-barred. The Court held that the computation of the limitation period by the 1st Appellate Authority was erroneous and directed the consideration of the appeal on merit. Consequently, the High Court set aside the orders of the CESTAT and the Commissioner (Appeals), remanding the case back to the Commissioner for a decision on merit.

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