2019 (7) TMI 1353 - HC - Service Tax

Condonation of the delay of 96 days in filing an appeal - Section 35G of the Customs Act, 1962 - demand of service tax as per the proviso to Section 73 (1) of the Finance Act, 1994 alongwith interest and penalty - delay properly explained - HELD THAT - The medical certificate of the person, who filed the affidavit on behalf of the appellant, was produced and the genuineness of the same was not disputed by the Tribunal. But, the Tribunal held that the medical certificate did not instill any confidence as no reasons were assigned except stating that he was suffering from leg pain. Insofar as the delay in making arrangement of the pre-deposit amount is concerned, the Tribunal found that the appellant s office/corporate office is at Hyderabad and, therefore, they could have taken the decision early and that the affidavit did not indicate any financial stress on the appellant for generating the amount to be deposited, and that therefore it was not a case for condonation of delay. Though the aforesaid reasons stated by the Tribunal could not be held entirely to be arbitrary, we think that the appellant cannot also be held to be wholly negligent in pursuing a statutory remedy. Once there is no dispute that the person, who was dealing with the matter, could not attend the office due to ill-health and it is supported by medical certificate filed along with the application, the Tribunal could have taken a liberal approach. The delay in this case is not abnormal but only 96 days. The question of law is answered in favor of the appellant - Appeal allowed.

Summary

Issues:
Delay in filing an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and the subsequent dismissal of the application for condonation of the delay.

Analysis:
The appellant filed an appeal under Section 35G of the Customs Act, 1962 after the Tribunal dismissed the application for condonation of a 96-day delay in filing an appeal against the demand of service tax, interest, and penalty imposed by the 1st respondent. The main issue raised was whether the Tribunal was justified in dismissing the appeal without condoning the delay despite proper explanation provided by the appellant. The reasons cited for the delay were the ill health of the person handling the matter and the difficulty in gathering the required deposit amount as per Section 35F. The Tribunal found the medical certificate supporting the ill health claim genuine but deemed the reasons for delay insufficient, stating that the appellant's office was in Hyderabad and could have acted promptly. However, the High Court opined that the Tribunal should have taken a more lenient approach considering the genuine reasons provided, especially since the delay was only 96 days and the appellant had already paid the service tax liability under the VCES scheme. Consequently, the Court held in favor of the appellant, condoned the delay, directed the Tribunal to number the appeal for disposal, and closed any related pending applications without costs.