2019 (3) TMI 865 - AT - Service Tax

Rectification of mistake - error apparent on the face of record or not - Held that - Since the appellant has conceded its liability to pay the interest, otherwise also it is so recorded in the order at para 6 (a) thereof, the prayer of the Department is acceptable as far as the payment of interest is concerned. It is apparent that appeal was partly allowed directing the Commissioner (Adjudication) to re-quantify the demand. Further from para 6 (a) of the order, it is apparent that there is no contumacious conduct of the appellant for deliberate violation of the provisions of Service Tax Laws as has otherwise also been held by Commissioner (Appeals). When both these observations are read together in the light of the ground of appeals that it is clear that ground for invoking extended period of limitation has not available with the department accordingly hold that despite having an observation in favour of the appellant the final and express verdict has been skipped in the order - the same amounts to an error apparent on record. The Appeal is partly allowed as show cause notice is held barred by time and the adjudicating authority is directed to re-quantify the demand i.e. the demand confining to the normal period itself and also the interest payable, proportionate to the demand of the normal period.

Summary

Issues:
Rectification of mistake regarding payment of interest and limitation period in the final order.

Analysis:
The judgment by the Appellate Tribunal CESTAT New Delhi involved two applications for rectification of mistake, one by the appellant and the other by the Department. The Department raised concerns about the absence of a direction for the appellant to deposit the interest amount despite acknowledging the liability in the final order. On the other hand, the appellant sought rectification regarding the limitation period, arguing that the show cause notice was time-barred. The Tribunal noted that the appellant had accepted the liability to pay interest, and the Department's prayer for payment of interest was accepted. However, considering the appellant's grievance, the Tribunal directed the Commissioner (Adjudication) to re-quantify the demand. It was observed that the appeal was partly allowed, emphasizing that there was no deliberate violation of Service Tax Laws by the appellant. The Tribunal concluded that despite observations in favor of the appellant, the final order lacked an express verdict, constituting an error apparent on record. Consequently, the Tribunal allowed the appellant's prayer, holding the show cause notice as time-barred and directing the re-quantification of the demand, limiting it to the normal period and proportionate interest payable.

In summary, the judgment addressed the rectification of mistakes related to the payment of interest and the limitation period in the final order. The Tribunal accepted the Department's prayer for interest payment by the appellant but directed the re-quantification of the demand considering the appellant's argument regarding the limitation period. The Tribunal highlighted the absence of deliberate violation by the appellant in Service Tax Laws, leading to the conclusion that the show cause notice was time-barred. The judgment rectified the errors in the final order, providing a clear direction for re-quantification of the demand within the normal period and proportionate interest payment.