2017 (5) TMI 654 - HC - Service Tax

Maintainability of appeal - appeal was dismissed by Commissioner (Appeal) on acccount of time limitation - Whether it was open for Tribunal to look into merits of order of Adjudicating Authority when order in appeal before Tribunal passed by Commissioner (Appeal) was such, whereby appeal was dismissed by Commissioner (Appeal) on the ground of limitation? - Held that - The scope available for Tribunal was, whether Commissioner (Appeal), decided appeal by dismissing on the ground of limitation, correctly or not, and if it finds that appeal was within the period of limitation or within condonable period of limitation, it could have remanded matter to Commissioner (Appeal) to decide appeal on merits but there was no scope of looking into correctness of Adjudicating Authority s order and even set aside the same - Matter is remanded to Tribunal to examine, whether appeal preferred by Assessee was within the period of limitation or within condonable period of limitation - appeal allowed by way of remand.

Summary

Issues involved:
1. Interpretation of the Tribunal's authority to review the Adjudicating Authority's order when the appeal was dismissed on the ground of limitation.

Analysis:
The judgment by the High Court of Allahabad pertains to an appeal under Section 35G of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994. The appeal arose from a decision by the Customs Excise & Service Tax Appellate Tribunal, Allahabad, in Appeal No. S.T./55998/2013-CU. The primary issue in question was whether the Tribunal had the jurisdiction to review the Adjudicating Authority's order when the appeal before the Tribunal was dismissed by the Commissioner (Appeal) on the grounds of limitation.

Regarding the liability of service tax, the Adjudicating Authority, namely the Additional Commissioner (Central Excise), Lucknow, had passed an order on 30.11.2010. The Respondent-Assessee then appealed under Section 85 of the Finance Act, 1994, before the Commissioner (Appeal) on 19.07.2012. However, the appeal was filed beyond the prescribed period of limitation, and the Commissioner (Appeal) dismissed it on 30.07.2012, solely on the basis of being time-barred without delving into the merits of the case.

The Assessee then filed a writ petition before the High Court, which directed them to seek recourse through an appeal before the Tribunal. The Tribunal, in its judgment, went beyond the question of the limitation period and delved into the merits of the Adjudicating Authority's order from 30.11.2010. The High Court held that the Tribunal's scope was limited to determining whether the Commissioner (Appeal) correctly dismissed the appeal on the grounds of limitation. The Tribunal should have remanded the matter to the Commissioner (Appeal) if it found the appeal was within the condonable period. The High Court emphasized that the Tribunal had no authority to review the correctness of the Adjudicating Authority's order.

The High Court concluded that the Tribunal's judgment was unsustainable as it overstepped its jurisdiction by examining the merits of the Adjudicating Authority's order. The Court ruled in favor of the Appellant and set aside the Tribunal's judgment dated 19.08.2016. The matter was remanded to the Tribunal to determine whether the appeal was within the limitation period or the condonable period. If the appeal was time-barred, the Tribunal would not have the jurisdiction to decide on the merits of the case.