2018 (1) TMI 563 - HC - Service Tax

Whether it was proper for the Tribunal to dismiss the appeal of the appellant on the ground of delay without considering the fact that the appellant was pursuing remedy before the Appellate authority of the first instance? Held that - since for about three years the appellant was pursuing relief from the First Appellate authority, that factor ought to have had been considered by the Tribunal while considering the appeal - the appellant s case on the merit was not heard at the appellate stage because the First Appellate authority also passed its order ex parte. No material was produced before us from the revenue to demonstrate that the First Appellate authority had heard the appeal after issuing notice of the hearing to the appellant. Matter remanded to the First Appellate authority for hearing afresh.

Summary

Issues:
1. Tribunal's dismissal of the appeal on the ground of delay without considering the appellant's pursuit of remedy before the First Appellate authority.
2. Whether the Tribunal's order is perverse or not.

Analysis:
1. The appellant was issued a notice regarding evasion of service tax, and the adjudicating authority ruled against the appellant, sustaining the demand. The appellant claimed to have received the order on 8th October, 2009, and filed an appeal before the First Appellate authority on 8th January, 2010, within the prescribed three-month timeframe as per Section 85(3) of the Finance Act, 1994. However, the appeal was dismissed by the First Appellate authority as time-barred without any plea for condonation of delay. The appellant's subsequent application for modification was also rejected by the First Appellate authority. The appellant then appealed to the Customs Excise and Service Tax Appellate Tribunal, which dismissed the appeal on the ground of delay, leading to the challenge before the High Court.

2. The High Court noted that the appellant had been pursuing relief from the First Appellate authority for about three years, and this factor should have been considered by the Tribunal. The appellant argued that the Tribunal could have condoned the delay under Section 86(5) of the Finance Act, 1994. The Court observed that the appellant's case on the merit was not heard at the appellate stage due to the ex parte order by the First Appellate authority. The Court found no evidence that the First Appellate authority had heard the appeal after issuing a notice to the appellant. Consequently, the High Court set aside the Tribunal's order and remanded the matter to the First Appellate authority for a fresh hearing. The Court invalidated the First Appellate authority's order due to lack of adequate opportunity for the appellant to be heard, directing the authority to re-examine the appeal and consider the question of delay or condonation of delay afresh within eight weeks.

3. The High Court disposed of the application and clarified that the allegations in the stay application, which was not called for an affidavit, would be deemed not admitted. The respondent's advocate waived the service of notice of appeal, leading to the disposal of the appeal itself without further formalities. The Court made no order as to costs in this matter.