2019 (1) TMI 507 - AT - Service Tax

Condonation of delay in filing of appeal - non-payment of pre deposit - section 35F of the Central Excise Act - Held that - Date of receipt being admitted by the Commissioner himself to be 15.06.2017 and appeal being filed on 08.09.2017, delay is only about 3 weeks over the normal appeal period and not even a month which was within the condonable period available with the Commissioner - Further having, been acknowledged that possession of appellant office was taken over by the Punjab National Bank authorized officer during the corresponding period, the Commissioner (Appeals) should not have refused to condone the delay on such narrow technical ground that flat number is different since there might be possibility that both the flats were being possessed by the appellant - delay condoned. Non-payment of statutory pre deposit amount for filing of appeal - Held that - The appellant contention that 80 per cent of duty liability has been discharged by them has not been supported by any documentary evidence. 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. 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 re-adjudication of both the appeals 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. The delay of 3 weeks in filing appeal before the Commissioner (Appeals-III) is condoned at this end - Pre-deposit having been made at this end, matter is remanded back to him for re-adjudication - appeal 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 duty demand, interests, and penalties confirmed in adjudication orders. The appellant's contention was that the appeal was filed within 30 days of the deadline due to sufficient grounds for delay, but the Commissioner rejected the appeal under section 35F of the Central Excise Act. The appellant argued that a substantial portion of the tax liability was paid, which could have been adjusted towards the pre-deposit amount. The AR for the department disputed this claim, stating that duty demands were confirmed against cenvat credit on capital goods not recorded in the CC register. The Commissioner found that no pre-deposit was made against the duty demand, leading to the dismissal of the appeal.

The Commissioner noted that the OIOs were received by the appellant after a significant delay, and no documentary evidence was provided regarding the receipt. The Commissioner also mentioned that the appellant's office was taken over by a bank around the time of OIO dispatch. The appellant requested proof of delivery from the department, but the Commissioner found the grounds for delay insufficient. The Commissioner relied on legal precedents to support the decision regarding the appeal timeline. The Tribunal observed that the delay in filing the appeal was minimal and should have been condoned, emphasizing the importance of substantial justice over technical considerations.

Regarding the non-payment of the pre-deposit amount, the appellant's claim of having discharged 80% of the duty liability lacked supporting evidence. The Tribunal highlighted that the appeal should not have been entertained without the statutory pre-deposit, but once admitted, the appellant should have been given the opportunity to make the deposit before the appeal's dismissal. The Tribunal also discussed the procedural aspects concerning the assessment of the appeal's merit by the Appellate Tribunal and the Commissioner.

The Tribunal emphasized the need for re-adjudication of both appeals by the Commissioner (Appeals) to assess the merits of the decision properly. The delay in filing the appeal was condoned, and the matter was remanded back for re-adjudication based on the observations made.

In conclusion, both appeals were allowed, the delay in filing was condoned, and the matter was remanded for re-adjudication by the Commissioner (Appeals-III) based on the Tribunal's observations.