2022 (3) TMI 940 - AT - Service Tax

Condonation of delay of 6 months and 22 days in filing appeal - rejection on the ground of time limitation or not - HELD THAT - It is observed that learned Commissioner (Appeals) has rejected the appeal on the ground of limitation while laying emphasis upon the decision of Hon ble Apex Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR 2007 (12) TMI 11 - SUPREME COURT wherein it was held by Hon ble Apex Court that language used in section 35(1) of Central Excise Act which is para materia to Section 85(3A) of Finance Act and makes the position clear that legislature intended the appellate authority to entertain the appeal by condoning delay only upto 30 days after the expiry of 60 days from the date of receipt of Orders-in-Original, which is the normal period for preferring appeal. Hon ble Apex Court observed that there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period beyond two months from the date of receipt of Order-in-Original. In these circumstances, it is observed that Commissioner (Appeals) has committed no error while rejecting the impugned appeal on the grounds of limitation. The simultaneous fact which is apparent beyond anybody s control is that during the said period of two months there had been unprecedented condition of outbreak of covid 19 panedemic resulting into complete nation wide lockdown. It is in view of these circumstances that the Tax department had issued ordinance No. 2/2020 extending the period of limitation with respect to the due date falling from 20.3.2022 to 27.6.2022 to 30.9.2020 - Keeping in view the same and mandate of article 141 of Constitution of India the period from 02.03.2020 when appeal would have been filed before Commissioner (Appeals), that Commissioner (Appeals) has not committed any error while dismissing the appeal on the ground of limitation, it being statutory mandate on the Commissioner (Appeals) on 25.09.2020 when appeal before him was actually filed is hereby excluded from the period of limitation. The period till 30.9.2020/ 28.2.2022 still remains excluded, hence appeal filed on 25.09.2020 is held to have been filed within the period of limitation. Irrespective that the benefit of both these announcements have to be extended in favour of the appellant. The matter cannot be held to have crossed the period of its limitation as the same was extended. This is a fit case to be remanded back to the Commissioner (Appeals) for adjudication on merits without considering plea of limitation The matter be preferably be decided within four months from the date of impugned order - the appeal stands allowed by way of remand.

Summary

Issues:
- Appeal filed after a delay of 6 months and 22 days
- Commissioner (Appeals) rejected the appeal on the ground of limitation
- Interpretation of statutory mandate on limitation periods due to COVID-19 pandemic

Analysis:
1. Appeal filed after a delay of 6 months and 22 days:
The case involved an appeal filed by the appellant against the rejection of their appeal by the Commissioner (Appeals) due to a delay of 6 months and 22 days. The appellant argued that the appeal was filed within the extended period granted by an ordinance issued by the department. The Commissioner (Appeals) emphasized the statutory mandate under Section 85(3A) of the Finance Act, which restricts the time for filing appeals to 60 days/two months, with a discretionary one-month extension. The Departmental Representative contended that the appeal exceeded the permissible time limit without any application for condonation of delay.

2. Commissioner (Appeals) rejected the appeal on the ground of limitation:
The Commissioner (Appeals) based the rejection of the appeal on the decision of the Hon'ble Apex Court in a previous case, which clarified the legislative intent behind the time limits for filing appeals. The court held that there was no power to condone the delay beyond 30 days after the expiry of the initial 60-day period. Consequently, the Commissioner's decision to reject the appeal on the grounds of limitation was deemed justified.

3. Interpretation of statutory mandate on limitation periods due to COVID-19 pandemic:
The Tribunal considered the impact of the COVID-19 pandemic on limitation periods, noting the nationwide lockdown and subsequent challenges faced during the relevant period. An ordinance and a subsequent order by the Hon'ble Apex Court excluded the period from 15.3.2020 to 28.2.2022 for computing the period of limitation in judicial or quasi-judicial proceedings. This exclusion applied to proceedings before quasi-judicial authorities, including the departmental Tribunal. Consequently, the Tribunal held that the appeal, filed on 25.09.2020, fell within the extended limitation period due to the exceptional circumstances caused by the pandemic.

In conclusion, the Tribunal allowed the appeal by remanding the case back to the Commissioner (Appeals) for adjudication on merits without considering the plea of limitation. The Tribunal directed the Commissioner to decide the matter preferably within four months from the date of the impugned order, taking into account the extended limitation period due to the COVID-19 pandemic.