2017 (9) TMI 700 - HC - Central Excise

Principles of Natural Justice - service of order - The claim of the petitioner in the writ petition is that the Order-in-Original was never served on the petitioner and that therefore the petitioner was completely in the dark until a garnishee notice was served on the bank - Held that - It is too hard to believe that a person who participated in the personal hearing on 24-7-2013 and submitted written arguments on the same date, got into a sense of false security as though no Order-in-Original could have been passed for four years thereafter. The reach of Section 37C cannot be extended to such an extent that unless an acknowledgement card containing the signature of the assessee is produced, the service of the Order- in-Original upon the assessee cannot be treated as completed. Once a registered letter or a speed post is proved to have been submitted at the post office and the necessary registration fee or speed post fee paid therein, a presumption would normally arise that in due course, the said registered letter reached the addressee in 48/72 hours - the burden shifts to the assessee to show that despite the entry in the online tracking system, they did not receive the copy of the order. By producing the printout of the online tracking system, the Revenue has proved in this case that they addressed, pre- paid and posted by registered speed post, the letter containing the Order-in-Original. Once these requirements of Section 27 of the General Clauses Act, 1897, are satisfied, the requirements of Section 37C of the Central Excise Act, 1944, would also stand satisfied - petition dismissed - decided against petitioner.

Summary

Issues: Challenge to Order-in-Original for service tax demand, Service of Order-in-Original, Compliance with Section 37C of Central Excise Act, Burden of proof on service of Order-in-Original.

Analysis:
The petitioner challenged an Order-in-Original confirming a service tax demand of ?20,41,386 for a works contract in 2010-11. The petitioner claimed ignorance of the order until a garnishee notice was served on the bank, alleging non-service of the Order-in-Original. The Court directed proof of service, which showed the Order was sent via speed post and delivered to the petitioner's address. The petitioner argued that without an acknowledgment, Section 37C of the Central Excise Act wasn't complied with.

The Court disagreed with the petitioner, noting the petitioner's active participation in proceedings before the Additional Commissioner, including attending a personal hearing and submitting written arguments. The Court found it implausible that the petitioner, who participated in the hearing, was unaware of the subsequent Order-in-Original. Reference was made to a previous case where a similar contention was rejected, emphasizing that Section 37C's reach couldn't demand an acknowledgment card for service completion.

The Court cited Section 27 of the General Clauses Act, stating service by post is deemed completed upon proper addressing, prepayment, and posting. By producing the online tracking system printout, the Revenue proved compliance with Section 27, satisfying Section 37C requirements. The Court held that the petitioner was not ignorant of the order, dismissing the writ petition. The burden of proof shifted to the petitioner to show non-receipt despite delivery confirmation, leading to the dismissal of the petition.