2023 (11) TMI 1073 - AT - Service Tax

Service of SCN - recovery notice was delivered late - Appeal rejected on the ground of limitation - appellant alleged to have not declared and discharged service tax towards income from various types of commission and some other taxable heads - HELD THAT - The Order-in-Original dated 30.7.2020 was served upon the appellant by two different modes one by speed post which apparently has not returned back undelivered ; two that the order was delivered to one of the employee of appellant namely Shri Prateek Rao. He admittedly is the employee of appellant as service supervisor - it is opined that issuance of copy of order by speed post does not amount to service thereof as such. Because it will be mere dispatch of the order. As per section 85 of Finance Act, 1994, period two months for filing appeal before the Commissioner (Appeals) has to reckon not from the date of Order-in-Original but from the date of receipt of the said order by the assessee. No doubt in section 37C, speed post is the mode of service but proof of dispatch is still mandatory. In the absence of proof of receipt of the O-I-O to the appellant sent by speed post, the same cannot be held to have been served. With respect to second mode of service, it is observed that Shri Prateek Rao, who admittedly received the order is an employee of the appellant in their workshop. In addition, ld.CA has placed on record an affidavit of Shri Prateek Rao, wherein he deposed that he received notice but he failed to bring it to the notice of the appellant. The contents of said affidavit are fully corroborated by partner of the appellant, Shri Abbas Ali Ghasswala. The present appeal shall not be thrown at the threshold and shall be decided on the merits of the case - this is a fit case to be remanded to the Commissioner (Appeals) with the direction to decide the appeal on merits of the case after giving reasonable opportunity of hearing to the appellant - appeal allowed by way of remand.

Summary

Issues involved:
The appeal against Order-in-Original rejection on the ground of limitation.

Summary:
The appellant provided services for motor vehicles and other services against various commissions. The appellant was alleged to have not declared and discharged service tax, resulting in a proposed recovery amount. The appeal against the order was rejected due to being filed after the limitation period. The appellant claimed they never received the original order until a recovery notice was received, which prompted them to request details from the Assistant Commissioner. The appeal was filed within the limitation period from the date of receiving the order. The appellant argued that the major period after the original order was during the COVID Pandemic, which should be excluded from the limitation period. The Commissioner (Appeals) rejected the appeal without providing a personal hearing.

The appellant argued that the order should be set aside as it was only received upon the recovery notice, and the period during the pandemic should be excluded from the limitation calculation. The appellant also contended that serving notice to an employee was not in compliance with the Central Excise Act. The appellant requested the order to be set aside and the appeal to be allowed.

The Department rebutted, stating that the notice was duly served on the appellant through an employee, and there was no issue with the calculation of the limitation period. The Department relied on the proof of service to the appellant as per statutory mandates. The Department argued that the order was sustainable, and the appeal should be dismissed.

The Tribunal observed that the original order was served through two modes, one being speed post and the other to an employee of the appellant. The Tribunal noted that the mere dispatch of the order through speed post does not constitute service. The appeal period should start from the date of receipt by the assessee. The Tribunal found that the order sent by speed post was not proven to be received. The employee who received the order failed to bring it to the appellant's notice, as confirmed by affidavits. The appellant only became aware of the order upon receiving the recovery notice. The Tribunal decided to remand the case to the Commissioner (Appeals) for a decision on the merits after providing a reasonable opportunity for a hearing within four months.

In conclusion, the appeal was allowed by way of remand for further consideration on the merits of the case.