2019 (3) TMI 305 - AT - Service Tax

Appealable Order or not? - communication dated 17.07.2018 - Section 86(1) of the erstwhile Finance Act, 1994 - Held that - Circular dated 28.02.2015 of Central Board of Excise Customs clarified that the Recovery Officer do have power to add, to amend, to vary or review any Garnishee Notice issued. However, the interest of Revenue has to be suitably safeguarded. It is stated in the said Circular that the facility to pay the arrears in installments shall generally be granted to a reasonable case of payment of arrears in installments as the company being under temporary financial distress. The Ld. Commissioner may cancel the permission in case of default in the payment of installments or when the company is becoming financial unviable and there is livelihood of winding up of business. The appellant by letters dated 17.01.2017 and 04.01.2018 requested the Ld. Commissioner for payment of arrears in installments, which is backed by the Board Circular dated 28.02.2015 being No. 996/3/2015-CX. In the said Circular, the Ld. Commissioner had allowed the payment of the outstanding dues in 21 installments as communicated by letter dated 10th April 2018. In the present case, the appellant failed to pay only one installment for the month of June 2018 within the stipulated period. In fact, the installment for the month of June was paid in the next month on 13.07.2018 alongwith the installment of July 2018. Therefore, the impugned Order dated 17.07.2018 was issued. It seems that the payment of installments of June and July 2018 as communicated by the appellant by letter dated 13.07.2018 may not be noticed while passing the order dated 17.08.2018. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Appealability of the communication dated 17.07.2018 under Section 86(1) of the Finance Act, 1994.
3. Merits of the case regarding the withdrawal of the facility for allowing payment of outstanding Service Tax by installments.

Analysis:
1. The appellant applied for condonation of delay in filing the appeal, citing sickness of the Counsel as the reason for the delay. After hearing both sides, the delay of 65 days was condoned by the Member (Judicial).

2. The question arose whether the communication dated 17.07.2018 is an appealable Order under Section 86(1) of the Finance Act, 1994. Section 86(1) allows appeals to the Appellate Tribunal for orders passed by a Commissioner of Central Excise under Section 73 or Section 83A. The appellant argued that the order withdrawing the facility for payment of outstanding Service Tax dues in installments has civil consequences affecting service tax recovery, making it appealable. The appellant cited relevant legal precedents to support their argument.

3. Upon examining the impugned communication dated 17.07.2018, it was found that the Commissioner had withdrawn the facility for installment payments due to the appellant's default in monthly payments. However, it was noted that the appellant had paid the outstanding dues for June and July 2018 in a subsequent month. The Circular dated 28.02.2015 clarified the conditions under which permission for installment payments could be withdrawn. As the appellant had only missed one installment and had subsequently paid the dues, the order withdrawing the facility was set aside, allowing the appellant to pay the outstanding Service Tax demand as per the earlier order dated 10.04.2018.

4. The application for condonation of delay in filing the appeal was allowed, and an additional application for certain directions in the appeal was dismissed as infructuous since the appeal was being disposed of. The order was dictated and pronounced in open court by the Member (Judicial).

This detailed analysis covers the issues of condonation of delay, appealability of the order, and the merits of the case regarding the withdrawal of the facility for installment payments of outstanding Service Tax.