2018 (10) TMI 170 - HC - Service Tax

Condonation of delay in filing appeal - Whether in the facts and circumstances of the case and in law was the Tribunal correct and justified in dismissing the application for condonation of delay? - Held that - The Writ Petition No. 1724 of 2016, was filed against the order dated 13th January 2016 (received on 2nd March 2016) within the three months for filing an Appeal to the Tribunal under Section 35B(3) of Central Excise Act, 1944. In fact it was filed in 4th May 2016. Thus, there is 28 days available. Thereafter, if one excludes the delay in obtaining the certified copy of the High Court order, the Appeal to the Tribunal is filed after consuming 51 days. Thus, if one excludes the 28 days available from the 51 days, the Appellant has to explain 23 days delay. This delay was held to be not sufficiently explained by the impugned order only on the ground that as the Petitioner whose Petition is pending in the High Court for over a year, the Appellant should have been ready with their Appeal to the Tribunal and filed it immediately after the High Court refused to entertain their Petition. The aforesaid basis of the rejection of the application for condonation of delay was not justified as the explanation offered for the delay viz. preparing the Appeal to file it to the Tribunal is reasonable. A party who prosecutes a Writ Petition bonafide expecting to succeed cannot be expected to keep preparing for an alternate remedy even before his Petition is rejected. The substantial question of law is answered in the negative i.e. in favour of the Appellant-Assessee against the Respondent-Revenue - delay in filing appeal is condoned - appeal disposed off.

Summary

Issues:
Challenge to dismissal of condonation of delay application in filing an appeal.

Analysis:
The appeal under Section 83 of the Finance Act, 1994 challenges the order passed by the Tribunal dismissing the condonation of delay application in filing an appeal. The appellant raised a question of law regarding the correctness of the Tribunal's decision. The appeal was admitted as it raised a substantial question of law, and it was taken up for final disposal due to the narrow scope of the dispute.

The facts leading to the appeal include the confirmation of service tax and imposition of a penalty by the Commissioner of Service Tax in January 2016. The appellant filed a writ petition challenging this order, which was later dismissed by the High Court due to the availability of an alternate remedy through an appeal to the Tribunal. The appellant filed the appeal to the Tribunal along with a condonation of delay application after receiving the certified copy of the High Court order.

The impugned order of the Tribunal dismissed the condonation application citing a delay in filing the appeal. The Tribunal held that the principles of Section 14 of the Limitation Act, 1963 were not applicable to statutory appeals under the Finance Act, 1994. However, the Supreme Court in M.P. Steel Corporation Vs. Commissioner of Central Excise held that the principle of Section 14 is applicable to statutory appeals. The time spent in prosecuting the writ petition before the High Court was considered bonafide and should be excluded while computing the period of limitation for filing the appeal before the Tribunal.

The High Court found that the delay in filing the appeal was sufficiently explained by the appellant. The court noted that a liberal approach should be adopted in deciding applications for condonation of delay. Therefore, the court answered the substantial question of law in favor of the appellant and set aside the Tribunal's order. The court directed the Tribunal to consider the appellant's appeal on merits.

In conclusion, the High Court disposed of the appeal by setting aside the Tribunal's order, condoning the delay in filing the appeal, and directing the Tribunal to consider the appeal on its merits.