2022 (4) TMI 1210 - HC - Service Tax

Condonation of delay in filing appeal before the Commissioner (appeals) - - Failure to make pre-deposit - non-compliance of mandatory requirement under Section 83 of the Act read with Section 35F of the Central Excise Act, 1944 - relevant date for entertainment of appeal - time limitation under Section 85 of the Act - power to condone the delay in filing the appeal beyond one month after the expiry of normal period specified under sub-section (3A) of Section 85 - HELD THAT - This Court has considered the rival submissions and examined the statutory provisions. It is an undisputed position that a right to file an appeal is not an absolute right but a right bestowed by the statute. Thus, such a statutory right of appeal can be made subject to conditions. However, though the right of appeal has been made conditional by Section 35F of the Central Excise Act, 1944, as applicable to Finance Act, 1994, by virtue of Section 85 of Chapter-V of the Finance Act, 1994, it is unambiguously suggested that a party who desires to challenge the Order-in-Original in appeal shall have to deposit in terms of provisions contained in Section 35F of the Central Excise Act. The requirement to make such deposit is to be fulfilled for the purpose of entertainment of appeal and not filing of the appeal - whenever the Legislature desired to make a pre-condition that certain amount is required to be deposited before the Appeal is filed, it is so provided in the legislation. Thus, in terms of Section 85 of Chapter-V of the Finance Act read with Section 35F of the Central Excise Act, so long as the appeal is not disposed of/dismissed/rejected by the Appellate Authority, it is open to the party to deposit the conditional amount pending the disposal of the appeal. In the present appeal, the petitioner having not placed any material evidencing compliance of conditions for entertainment of appeal, this Court, therefore, confirms the Order-in-Appeal on this score. Time Limitation - HELD THAT - The instant case falls within the ambit of sub-section (3A) of Section 85 of the Act which without admitting any ambiguity hints at that an appeal can be presented within two months from the date of receipt of the Order-in-Original passed by the adjudicating authority under Section 73 relating to service tax, interest or penalty under Chapter-V of the Finance Act, 1994. Proviso thereto unequivocally lays down that in case of delay in presentation of appeal, the discretion of the Commissioner of Central Excise (Appeals) in considering application for condonation of delay is restricted. If the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months, he has the jurisdiction to allow it to be presented within a further period of one month. In identical setting of provisions of statute that is contained in the statute presently under consideration, the Hon ble Supreme Court has laid down that Section 5 of the Limitation Act, 1963 has no application where the Legislature has prescribed stipulated outer limit restricting discretion to condone the delay - reliance can be placed in CHHATTISGARH STATE ELECTRICITY BOARD VERSUS CENTRAL ELECTRICITY REGULATORY COMMISSION AND OTHERS 2010 (4) TMI 1031 - SUPREME COURT . Regard being had to the position of law, on the material available on record that the petitioner having received the Order-in-Original passed under Section 73 of the Act on 09.02.2018, filed the appeal under Section 85 of Chapter-V of Finance Act, 1994 on 10.01.2022, thereby there caused a delay beyond the period of 3 months (i.e., normal period of 2 months condonable period of 1 month with the discretion of the Appellate Authority), it is held that there is no infirmity found to warrant interference with the Order of the Appellate Authority. The explanation of the petitioner that the delay was on account of the complexities of law could not stay the operation of law of limitation - since the statutory period specified for filing of appeal (2 months 1 month) had expired long back in May, 2018 itself and the appeal came to be filed by the petitioner only on 10.01.2022, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the petitioner-assessee at all. Thus, since the statutory period specified for filing of appeal (2 months 1 month) had expired long back in May, 2018 itself and the appeal came to be filed by the petitioner only on 10.01.2022, without substantiating the plea about inability to file appeal within the prescribed time, no indulgence could be shown to the petitioner-assessee at all. The case law in cited by the petitioner is misplaced. The order of the Commissioner (Appeals) dated 27.01.2022 rejecting the appeal on the ground that the appeal has been filed belatedly beyond the period stipulated under Section 85 of the Act without complying with the condition stipulated for entertainment of appeal under Section 83 of Chapter-V of the Finance Act, 1994 read with Section 35F of the Central Excise Act, 1994 does not warrant indulgence in exercise of power conferred under Article 226 of the Constitution of India - Petition dismissed.

Summary

Issues Involved:
1. Non-compliance with pre-deposit requirement under Section 83 of the Finance Act, 1994 read with Section 35F of the Central Excise Act, 1944.
2. Delay in filing the appeal beyond the period specified under Section 85 of the Finance Act, 1994.

Detailed Analysis:

1. Non-compliance with Pre-deposit Requirement:
The petitioner challenged the legality of the order passed by the Commissioner (Appeals), Bhubaneswar, rejecting the appeal due to non-compliance with the mandatory pre-deposit requirement. The court examined the statutory provisions and previous case laws to determine the validity of this rejection.

Relevant Statutory Provisions:
- Section 83 of the Finance Act, 1994: Applies certain provisions of the Central Excise Act, 1944, to service tax, including Section 35F.
- Section 35F of the Central Excise Act, 1944 (as amended by Finance (No. 2) Act, 2014): Mandates a pre-deposit of 7.5% or 10% of the duty demanded or penalty imposed before an appeal can be entertained.

Court's Observations:
- The court cited Indian Oil Corporation Vrs. Odisha Sales Tax Tribunal, which clarified that an appeal can be filed without pre-deposit, but it will not be entertained unless the pre-deposit condition is met.
- The court noted that the amendment to Section 35F curtailed the discretion previously available to the appellate authority to waive the pre-deposit requirement.
- The court referenced the Tecnimont Pvt. Ltd. Vrs. State of Punjab case, which emphasized that statutory mandates on pre-deposit cannot be overridden by implied powers.

Conclusion:
The petitioner failed to comply with the pre-deposit requirement, and the court affirmed the appellate order, stating that the appeal could not be entertained without meeting this statutory condition.

2. Delay in Filing the Appeal:
The petitioner also contested the rejection of the appeal on the grounds of being time-barred, arguing that the delay was due to complexities in law and financial hardship.

Relevant Statutory Provisions:
- Section 85 of the Finance Act, 1994: Specifies the time limits for filing an appeal and the conditions under which delays can be condoned.
- Sub-section (3A): An appeal must be presented within two months from the date of receipt of the decision, with a possible extension of one month for sufficient cause.

Court's Observations:
- The court noted that the appeal was filed 1430 days late, far beyond the permissible period.
- The court referenced Chattisgarh State Electricity Board Vrs. Central Electricity Regulatory Commission, which held that Section 5 of the Limitation Act, 1963, does not apply where the statute prescribes a specific outer limit for condonation of delay.
- The court also cited Popat Bahiru Govardhane Vrs. Special Land Acquisition Officer, emphasizing that the law of limitation must be applied rigorously, even if it causes hardship.

Conclusion:
The court found no valid reason to condone the delay, as the statutory period for filing the appeal had long expired. The explanation provided by the petitioner was insufficient to justify the delay.

Final Judgment:
The court dismissed the writ petition, affirming the appellate order dated 27.01.2022, on both grounds of non-compliance with the pre-deposit requirement and the delay in filing the appeal. The court emphasized that statutory conditions for filing and entertaining appeals must be strictly adhered to, and no indulgence could be shown to the petitioner in this case.