2013 (11) TMI 559 - HC - Service Tax

Condonation of delay - Appeal not filed on time by the lawyers appointed - CESTAT denied condonation of delay for no bonafide reason - Held that - it was noted by the Tribunal that the appellant being a CHA firm, it received order-in-appeal on 17th January, 2012, but, did not prefer appeal within the time prescribed. The Tribunal did not believe the reasons put forth by the appellant-petitioner of his having a bona fide belief that the receipt of the order of the Commissioner (Appeals) had not arrived for a long time on the ground that in the application for condonation of delay itself, it was specified that such an order was received on 17th January, 2012 - Tribunal nowhere has questioned its power to condone the delay of about three months period. It was only on account of its doubting the credentials of the petitioner that it chose to reject its request for condonation of delay. Petitioner is not to gain anything by preferring such an appeal belatedly, when it has already deposited substantial amount from the entire demand of Service Tax and is also ready to abide by any other condition, there is also no justification in denying to condone the delay in the application moved by him. Assuming that the petitioner had received copy of order of the appellate forum on 17th January, 2012, as mentioned by the Tribunal, then also, he has sufficiently explained the reasons for such delay in preferring the appeal. He has shown a bona fide belief that the Association was pursuing the cause of all CHAs jointly, if such ground of genuine belief led the petitioner not to pursue his individual cause; particularly in wake of the certificate of Customs House Agents Association, we have no hesitation in holding that the delay was well explained. Substantive cause of the litigant is far more vital to be considered; when pitted against technicality and the procedural delays. As fundamental issue challenged by the other CHAs is at large before the Tribunal, his case on substantive ground should be permitted to be proceeded with rather than defeating him on technical ground - Delay condoned.

Summary

Issues:
Challenge to decision of Customs, Excise and Service Tax Appellate Tribunal regarding Service Tax on reimbursable expenses incurred by Customs House Agents (CHAs). Delay in filing appeal leading to dismissal by Tribunal. Request for condonation of delay and substantive rights of the petitioner.

Analysis:

1. Challenge to Tribunal Decision on Service Tax:
The petitioner, a licensed Customs House Agent (CHA), contested the demand for Service Tax on reimbursable expenses incurred for the period from 1st October, 2003 to 31st March, 2008. The Adjudicating authority confirmed a partial demand of Service Tax, leading to an appeal to the Commissioner (Appeals) which was rejected. Subsequently, the petitioner faced a situation where no appeal was filed on their behalf by the Association, causing a delay of 3 months and 1 day in filing the appeal before the CESTAT. The CESTAT dismissed the appeal and stay application, prompting the petitioner to seek reliefs through a writ petition before the High Court.

2. Delay in Filing Appeal and Condonation:
The petitioner argued that despite having a strong case on merits, the Tribunal's decision to dismiss the appeal based on a technical ground of delay was unjust. Citing legal precedents, the petitioner contended that the delay in filing the appeal should not impede their substantive rights. The High Court acknowledged the petitioner's explanation for the delay, emphasizing that the fundamental issue challenged by the CHAs should take precedence over procedural delays. The Court held that the delay was adequately explained, and the petitioner's substantive rights should not be compromised due to technicalities.

3. Court's Decision and Relief Granted:
After examining the arguments from both sides, the High Court allowed the petition, quashing the Tribunal's order dated 4th December, 2012. The Court granted consequential reliefs of restoring the appeal and stay applications. It was emphasized that the Tribunal should determine the substantive issues after affording a personal hearing to both parties. The Court discharged the notice with no order as to costs, thereby providing relief to the petitioner and ensuring a fair consideration of the substantive grounds in the appeal process.

In conclusion, the High Court's judgment addressed the challenges faced by the petitioner regarding Service Tax demands, the delay in filing the appeal, and the importance of upholding substantive rights despite procedural delays. The decision highlighted the need to balance technicalities with the fundamental issues at stake, ultimately providing relief to the petitioner and directing the Tribunal to focus on the substantive aspects of the case.