2018 (10) TMI 97 - AT - Service Tax

Belated filing of appeal - non-payment of pre deposit - case of appellant is that they could not file the said appeal before the Commissioner (Appeals) within two months of receipt of the order but filed the same within 30 days thereafter with a prayer for condonation of delay explaining sufficient grounds for such delay but that was not accepted by the Commissioner (appeals). Held that - Section 35B (b) empowers the Appellate Tribunal to entertain appeal against an order passed by the Commissioner (Appeals) under Section 35A and in view of Sub-Section 4 to Section 35A, such order of the Commissioner (Appeals), at the time of disposal of appeal before him, shall state the points for determination, the decision thereon and the reasons for such decisions - Since this Appellate Tribunal cannot go beyond the order of the Commissioner (Appeals) to scrutinize the merit of the decision of the adjudicating authority, it is a fit case which necessitates readjudication by the Commissioner (Appeals) as under Section 35A (3). He is also empowered to make such further enquiry as may be necessary in order to pass such order as he may think proper and not to confine his views on the merits of the order of the adjudicating authority. Nonpayment of statutory pre deposit amount for filing of appeal - appellant contention that 80 per cent of duty liability has been discharged by them has not been supported by any documentary evidence - Held that - Going by the statutory provision appeal should not have been entertained or admitted for hearing bereft of statutory pre deposit but the moment it is admitted for hearing, such failure on the part of appellant would have been pointed out to it enabling it to make pre deposit so as to ensure natural justice and not to dismiss the appeal at the end of hearing, after completing the entire exercise of appeal proceedings - Further having regard to the fact that 10 per cent pre deposit vide challan as exhibit A is filed at this end, no further discussion is required to be done on pre deposit. The appeal is allowed and the delay of 3 weeks in filing appeal before the Commissioner (Appeals-III) is condoned at this end - Predeposit having been made at this end, matter is remanded back to him for re-adjudication - application allowed.

Summary

Issues:
Disposal of appeals solely on the ground of belated filing and non-payment of pre-deposit.

Analysis:
The appellant filed two appeals before the Commissioner (Appeals III), GST & CX, Mumbai against adjudication orders confirming duty demand, interests, and penalties. The appellant's contention was that the appeal was filed within 30 days after the two-month period due to sufficient grounds for delay, but the Commissioner rejected the delay condonation. The appellant argued that a substantial portion of the tax liability was already paid, which could have been adjusted towards the pre-deposit amount. However, the Commissioner dismissed the appeal under section 35F of the Central Excise Act, applicable to service tax matters, stating that no pre-deposit was specifically made against the duty demand. The appellant also claimed they were not provided with the opportunity to be heard on the merit of the case.

In response, the department disputed the appellant's claims and stated that the duty demand, interests, and penalties were confirmed by the Orders-in-Original (OIOs), and as per Section 35F, the appeal required a pre-deposit. The Commissioner found that the appellant received the OIOs on 15.06.2017, after 9 months, and rejected the appellant's grounds for delayed filing. The Commissioner also noted that the appellant failed to provide documentary evidence of the OIOs' receipt. The department argued that the delay condonation was rightly rejected, and the appeal was unsustainable without the pre-deposit.

Upon reviewing the case records and OIA, it was found that the appellant acknowledged the receipt of OIOs on 15.06.2017. The Commissioner's decision was based on the Supreme Court's ruling in Singh Enterprises Vs. Commissioner of C. Ex., emphasizing the importance of filing appeals within the prescribed timelines. However, the delay in this case was only about 3 weeks over the normal appeal period, which was within the condonable period available to the Commissioner. The Commissioner's refusal to condone the delay on technical grounds was deemed unjust by citing the principle of advancing substantial justice over technical considerations.

The Tribunal observed that the appeal should not have been admitted without the statutory pre-deposit, but once admitted, the appellant should have been informed to make the pre-deposit to ensure natural justice. The case necessitated a re-adjudication by the Commissioner (Appeals-III) to assess the merit of the decision concerning the tax liability of the appellant, as the original decision lacked discussion on the merit of the appeal.

Therefore, the appeal was allowed, the delay in filing was condoned, and the matter was remanded back to the Commissioner for re-adjudication based on the observations made.

(Pronounced in the Court on 27/09/2018)