2025 (1) TMI 144 - AT - Service Tax

Service of order - sending of an order by speed post complies with the provision of section 37C(1)(a) of the Central Excise Act or not - Dismissal of appeal on the grounds of limitation holding that the appeal filed on 02.11.2017 is beyond permissible condonable time limit of one month hence cannot be condoned. Service of notice - HELD THAT - In the present case the order was not dispatched by registered post. The order was sent by speed post and under the amended section 37C, there should be proof of delivery also. In the present case, admittedly, there is no proof of delivery since what has been stated by the Assistant Commissioner in his comments is that the speed post which was sent to the appellant containing the order in original did not return to the office. Hon ble High Court Mumbai, also in the case AMIDEV AGRO CARE PVT LTD VERSUS UNION OF INDIA AND OTHERS 2012 (6) TMI 304 - BOMBAY HIGH COURT held that Order Is To Be Served On The Assessee Or His Agent By Registered Post A.D. Or Any Other Mode Specified In Section 37C and mere proof of dispatch of order is not sufficient compliance of the section. Condonation of delay - HELD THAT - In the present case, no doubt there occurred a delay in filling the appeal before Commissioner (Appeals) but the same was within the condonable powers of the Commissioner (Appeals) but he didn t call for the explanation from the appellant. The appeal has been dismissed simply holding that there is no request on record seeking condonation of delay in filing the appeal. The order is clear to hold that no opportunity of personal hearing was given to the appellant nor any reasonable time to file the miscellaneous application - the very basic principle of Principles of Natural Justice has been violated by Commissioner (Appeals). In view thereof and the above discussed decisions, the impunged order of Commissioner (Appeals) set aside. Since there are no findings with respect to the merits of the Order in original as was appealed before Commissioner (Appeals) the matter remanded back to Commissioner (Appeals) to decide the appeal on its merits after giving the proper opportunity of being heard to the appellant. Conclusion - Service by speed post is valid provided there is proof of delivery. In the absence of any proof of delivery, it cannot be said that there is effective service of notice, as contemplated under Section 37C of the Act. Appeal allowed by way of remand.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the sending of an order by speed post complies with the provision of section 37C(1)(a) of the Central Excise Act, specifically regarding proof of delivery.
Whether the Commissioner (Appeals) erred in dismissing the appeal on the grounds of limitation without considering the merits of the case and without providing an opportunity for the appellant to request condonation of delay.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Compliance with Section 37C(1)(a) of the Central Excise Act

Relevant Legal Framework and Precedents: Section 37C of the Central Excise Act, applicable to service tax matters via section 83 of the Finance Act, mandates that orders must be served by registered post with acknowledgment due or by speed post with proof of delivery. The amendment in 2013 included speed post as a valid mode of service, provided there is proof of delivery.
Court's Interpretation and Reasoning: The court emphasized that mere dispatch of an order by speed post does not satisfy the legal requirement unless there is proof of delivery. The tribunal noted that the absence of such proof rendered the service ineffective.
Key Evidence and Findings: The Assistant Commissioner stated the order was dispatched by speed post, which did not return undelivered. However, there was no evidence of actual delivery to the appellant.
Application of Law to Facts: The tribunal found that the lack of proof of delivery meant the service was not compliant with section 37C(1)(a), thus invalidating the presumption of service.
Treatment of Competing Arguments: The appellant argued that the lack of proof of delivery invalidated the service, while the department maintained that dispatch sufficed. The tribunal sided with the appellant, citing precedents requiring proof of delivery.
Conclusions: The tribunal concluded that the service was not legally compliant due to the absence of proof of delivery, impacting the validity of the limitation period for filing the appeal.

Issue 2: Dismissal on Grounds of Limitation

Relevant Legal Framework and Precedents: The tribunal referred to principles of natural justice and precedents emphasizing the importance of providing an opportunity for appellants to explain delays.
Court's Interpretation and Reasoning: The tribunal criticized the Commissioner (Appeals) for dismissing the appeal on technical grounds without considering a request for condonation of delay or providing a hearing.
Key Evidence and Findings: The tribunal noted that the Commissioner (Appeals) failed to call for an explanation from the appellant regarding the delay and did not provide a personal hearing.
Application of Law to Facts: The tribunal found that the Commissioner (Appeals) had the power to condone the delay but did not exercise it due to procedural lapses.
Treatment of Competing Arguments: The appellant argued for condonation based on the lack of proper service, while the department insisted on the dismissal due to delay. The tribunal found merit in the appellant's position.
Conclusions: The tribunal held that the dismissal on limitation grounds was improper, as the appellant was not given a fair chance to address the delay.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "Service by speed post is valid provided there is proof of delivery. In the absence of any proof of delivery, it cannot be said that there is effective service of notice, as contemplated under Section 37C of the Act."
Core Principles Established: The necessity of proof of delivery for service by speed post under section 37C(1)(a) and the importance of adhering to principles of natural justice in procedural matters.
Final Determinations on Each Issue: The tribunal set aside the impugned order of the Commissioner (Appeals) and remanded the case for a decision on merits, emphasizing the need for proper service and consideration of condonation requests.

The tribunal's decision underscores the critical role of procedural compliance and fairness in administrative adjudication, particularly concerning service of orders and the handling of appeals. The judgment reflects a commitment to ensuring that appellants are granted due process and that technicalities do not impede justice.

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