2017 (12) TMI 1237 - HC - Central Excise

Whether in the facts and circumstances of the case and in law respondent no. 3 was required to serve a copy of the impugned order dated 9th January, 2015 upon the Official Liquidator, High Court, Bombay? Held that - in view of the fact that the order was not served on the company and on account of closure of the company as recorded above, there was no justification in proceeding to pass the impugned orders. On behalf of the Revenue, Mr. Bangur, learned counsel for the Revenue has not been able to demonstrate as to how the case of the appellant is incorrect. Admittedly, the company was closed at the relevant time and there was proper service of the impugned orders upon the appellant. The CESTAT dismissed the appeals and concluded that the mode of service by affixing a copy of the order on the factory gate was within the purview of Section 37C of the Act on the basis that this was not disputed by the appellant - Delay in filing the appeals is condoned and the Central Excise Appeals are remanded to the Commissioner of Central Excise (Appeals) for fresh consideration on merits and in accordance with law

Summary

Issues involved:
1. Service of impugned orders on the Official Liquidator.
2. Validity of orders passed by the Deputy Commissioner.
3. Delay in filing appeals.
4. Mode of service of orders by affixing on factory gate.
5. Power of Commissioner (Appeals) to condone delay.

Issue 1: Service of impugned orders on the Official Liquidator
The appellant, engaged in manufacturing, faced a shortage issue leading to a demand of CENVAT credit and penalty. The order was not served as the factory was closed due to winding up proceedings. The appellant argued that the order should have been served through Registered Post Acknowledgment Due. The Tribunal accepted the Revenue's version based on a panchnama, leading to dismissal of appeals. However, the High Court found that the order was not served due to the closure of the company and lack of proper justification, emphasizing the importance of service on the Official Liquidator.

Issue 2: Validity of orders passed by the Deputy Commissioner
The orders by the Deputy Commissioner, confirming demands and penalties, were not served properly due to the company's closure. The appellant contended that the delay in filing appeals was due to non-receipt of the adjudication order. The Tribunal upheld the orders, citing the panchnama as evidence of proper service. However, the High Court found that the mode of service by affixing on the factory gate did not justify proceeding with the impugned orders, leading to the setting aside of the orders.

Issue 3: Delay in filing appeals
The Commissioner had dismissed the appeals as time-barred, leading to further appeals to the Tribunal. The appellant argued that the delay was due to non-communication of the adjudication order. The Tribunal rejected the appeals based on the prescribed period of limitation. However, the High Court found that the delay was unjustified due to improper service of orders, leading to the remand of the appeals for fresh consideration.

Issue 4: Mode of service of orders by affixing on factory gate
The Tribunal upheld the mode of service by affixing orders on the factory gate, citing Section 37C of the Act. The High Court, however, found this mode of service inadequate, emphasizing the necessity of proper service, especially on the Official Liquidator in such cases. The Court set aside the impugned orders based on the improper mode of service.

Issue 5: Power of Commissioner (Appeals) to condone delay
The Commissioner (Appeals) had not condoned the delay in filing appeals beyond the prescribed period of limitation. The Tribunal upheld this decision, leading to the dismissal of appeals. The High Court, however, found that the delay was due to improper service of orders, indicating that the Commissioner could have considered condoning the delay. The Court remanded the appeals for fresh consideration on merits and in accordance with the law.

In conclusion, the High Court set aside the impugned orders, condoned the delay in filing appeals, and remanded the cases for fresh consideration based on the issues of improper service, validity of orders, delay in filing, mode of service, and the power of the Commissioner to condone delay.