2019 (5) TMI 1243 - AT - Central Excise

Service/communication of Order - relevant date - dismissal of appeal on limitation - whether the date of communication of the order-in-original has to be taken as 12 September, 2017, when the order was served on the security guard, as the factory was lying closed? - HELD THAT - Section 37C provides that all notices shall be served by tendering or sending it by registered post with acknowledgement due or by speed post or approved courier to the person to whom it is intended or his authorised agent, if any. In the present case, it appears that the appellant also has neglected in making proper arrangement for receipt of their mail/dak. However, as the factory was lying closed, the notice was actually delivered to the management of the appellant only on 25 November, 2017 when the security guard delivered to the notice to the proper person, that can only considered as the effective date of service. The purpose of the notice is to put the requisite person on notice or alert so that he can take proper steps. Thus, the earlier date i.e. 12 September, 2017 was not the proper service on the security guard. The impugned order is set aside and appeal allowed by way of remand with direction to the learned Commissioner (Appeals) to decide the appeal on merit.

Summary

Issues:
1. Date of communication of the order-in-original
2. Validity of the show cause notice invoking the extended period of limitation

Analysis:

Issue 1: Date of communication of the order-in-original
The main contention revolved around whether the date of communication of the order-in-original should be considered as 12 September, 2017, when it was served on the security guard due to the factory being closed. The appellant argued that the order was effectively received on 25 November, 2017, when it reached the city office. The Commissioner (Appeals) dismissed the appeal on the ground of limitation, considering the earlier date. However, the appellant contended that the security guard was not the proper person for service and that the order was received by the Director at the city office on the later date. The Tribunal analyzed the service requirements under Section 37C, emphasizing that notices should be served to the intended person or their authorized agent. It was observed that the appellant neglected to arrange for proper receipt of mail. The Tribunal concluded that the notice was effectively delivered to the management on 25 November, 2017, and set aside the impugned order, allowing the appeal for a remand to decide on the merit.

Issue 2: Validity of the show cause notice invoking the extended period of limitation
The second issue raised was regarding the validity of the show cause notice invoking the extended period of limitation. The Revenue argued that the order-in-original served at the factory address on 12 September, 2017, was effective, as the appellant did not update their correspondence address with the Department. On the other hand, the appellant contended that the notice was erroneously issued invoking the extended period of limitation, as they had paid the calculated tax/duty but not the interest, without any prior indication from the Revenue. The Tribunal considered these arguments and found that the notice served on the security guard was not proper service, and the effective date was when it reached the proper person on 25 November, 2017. Consequently, the Tribunal held that the show cause notice invoking the extended period of limitation was not maintainable.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal for a remand to the learned Commissioner (Appeals) to decide on the merit, emphasizing the importance of proper service of notices and adherence to statutory provisions in such matters.