2024 (3) TMI 352 - AT - Service Tax

Condonation of delay in filing of the appeal by the appellants before the Commissioner (Appeal) - whether the case merits consideration of the Tribunal for directing the authorities below for fresh adjudication of the case on merits? - HELD THAT - The maximum period within which the Commissioner (Appeals) can entertain an appeal before him is three months. As in the present case the appeal has been filed by the appellants beyond the prescribed maximum period of three months, there is no legal provision under which the same could be obtained by the Commissioner (Appeals). Hon ble Supreme Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR 2007 (12) TMI 11 - SUPREME COURT , even though dismissed the appeal filed by the party, however had held that the Commissioner of Central Excise (Appeals) and the Tribunal being creatures of Statute are vested with the jurisdiction to condone the delay beyond the permissible as provided under the respective Statute. Further, it was also held that there cannot be any straitjacket formula for accepting or rejecting the explanation furnished for delay caused in taking steps, and it has to be decided on merits of the case after taking note of the peculiar background facts of each of the case. It is a well settled principle that the statue must be read as a whole in its context to understand its true meaning and intent. When the question arises as to the meaning of a certain provision in the statue, it is not only legitimate but proper to read that provision in its context. The context here means, the statute as a whole, the previous state of the law, other statues pari materia, the general scope of the statue and the mischief that it was intended to remedy - when an issue had not been examined in detail by the original authority, and when such matter was preferred in an appeal before the Commissioner (Appeals), in case if such appeal is filed beyond the time limit provided in law, and the first appellate authority is unable to entertain the appeal on account of timebar, the course of option available to the person aggrieved is to appeal before the next appellate authority i.e., the Tribunal in this case, who could consider such a case in terms of the legal provisions of the respective Acts and pass such order as it thinks fit, in confirming, modifying or annulling the decision or order appealed against or refer the case back to the authority which passed such order or direct for fresh adjudication of the case. Similar matter the Co-ordinate Bench of this Tribunal in the case of M/S HAIKO LOGISTICS INDIA PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX- DELHI 3 AND COMMISSIONER OF CENTRAL GST AUDIT-II (VICE-VERSA) 2023 (8) TMI 539 - CESTAT NEW DELHI have held that no demand of service tax can sustain merely on the basis of the difference in figures in ST-3 and Form 26AS as there is difference in the methodology in preparing both the records and Form No. 26AS is not a statutory document for determining the taxable turnover under the service tax law. There are no strong grounds to hold that the appellants did not pay service tax in respect of the differential amount demanded in the show cause proceedings, owing to the reason that the Audit Report No.ST/104/2014-15 of the Department determining the service tax liability of the appellants after verification of the records relating to the period July, 2010 to March, 2014, have been duly paid by the appellants and the same has been accepted by the Department - the merits of the case have not been examined by the authorities below and by the Principal Commissioner (Appeals), as he had rejected the appeal filed by the appellants only on the basis of limitation of time. The ends of justice would be met, if the case of the appellants was examined on merits by allowing the case to be heard by the original authority in fresh adjudication of the case, by taking into account all the relevant facts and by following the legal provisions of the Finance Act, 1994 - case remanded for de novo consideration of this case by the original authority in fresh adjudication of the case, after taking additional evidence and documents to be submitted by the appellants, if any - appeal allowed by way of remand.

Summary

Issues Involved:
1. Condonation of Delay in Filing Appeal
2. Merits of Service Tax Demand based on Income Discrepancy

Condonation of Delay in Filing Appeal:
The appellants, M/s Vishal Buildcon, filed an appeal before the Principal Commissioner (Appeals) beyond the maximum permissible period of three months. The Principal Commissioner dismissed the appeal as time-barred under Section 85(3A) of the Finance Act, 1994. The appellants argued that the delay was due to their consultant's failure to file the appeal on time and requested condonation of the delay. The Tribunal noted that the statutory provisions limit the Commissioner (Appeals) to condone delays only up to one month beyond the initial two months, and thus, the appeal filed beyond this period could not be entertained.

Merits of Service Tax Demand based on Income Discrepancy:
The appellants contended that the service tax demand of Rs. 69,35,707/- was based on a discrepancy between the income reported in their ITR/TDS and the taxable value declared in their ST-3 returns. They argued that the differential amount had already been paid as per the Audit Report No.ST/104/2014-15 and that the original authority did not consider their explanations. The Tribunal highlighted the need for a detailed examination of the facts and documents, emphasizing that mere differences in figures between Form 26AS (income tax) and ST-3 returns (service tax) do not justify the service tax demand. The Tribunal referenced similar cases where demands based solely on such discrepancies were not sustained.

Conclusion:
The Tribunal set aside the impugned order and remanded the case to the original authority for fresh adjudication. The original authority was instructed to consider all relevant facts, additional evidence, and documents submitted by the appellants, ensuring compliance with the principles of natural justice. The Tribunal emphasized the importance of proper verification and reconciliation of figures before issuing show cause notices based on ITR-TDS data.