2015 (9) TMI 887 - HC - Service Tax

Condonation of delay - Whether the Tribunal is right in rejecting the condonation of delay applications filed by the appellant for condoning the delay of 311 days in filing the appeals - Held that - We are not happy with the reasoning given by the Tribunal for dismissing the applications filed by the appellant for condonation of delay of 311 days stating that the appellant having appeared in the personal hearing before the adjudicating authority, did not follow up the case. It is seen from the records that personal hearing in these matters took place on 13-10-2011 and the Order-in-Original is said to have been passed on 10-5-2012, namely, after a lapse of seven months. Before the Adjudicating Authority, there is methodology prescribed for prior intimation regarding the passing of the order or its despatch. Only when such order is received by the person concerned, he will be in the know of things. It is, therefore, necessary for a party to explain the delay from the date of actual service either on the person concerned or his authorized representative and such delay has to be properly explained when an appeal is filed after the statutory period prescribed. There is no necessity to go into the issue as to whether the party should pursue the matter before the adjudicating authority as to when he is going to pass the order. In our considered opinion, all that the Tribunal needs to decide is whether the delay of 311 days from the date of service of the order on the alleged authorized representative has been properly explained - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to rejection of condonation of delay applications for filing appeals.

Analysis:
The case involved appeals challenging Final Order Nos. 40593 and 40594 of 2014 passed by the Customs, Excise and Service Tax Appellate Tribunal. The main issue was whether the Tribunal was correct in rejecting the condonation of delay applications filed by the appellant for a delay of 311 days in filing the appeals. The appellant, a provider of cellular mobile telephone services, was alleged to have availed credit based on invalid documents. The Commissioner confirmed a demand for recovery of Cenvat Credit along with interest and imposed a penalty. The appellant claimed they only became aware of the order after receiving a communication from the department, leading to a delay in filing the appeals. The Tribunal rejected the condonation applications citing negligence and inaction by the appellant after the personal hearing.

Upon review, the High Court expressed dissatisfaction with the Tribunal's reasoning for dismissing the condonation applications. The Court highlighted that the appellant's appearance at the personal hearing did not automatically imply a duty to actively follow up on the case progress. The Court emphasized the need for proper explanation of the delay from the date of actual service of the order, rather than focusing on the party's actions before the adjudicating authority. The Court stressed that the crucial factor was whether the delay in filing the appeals had been adequately explained. Consequently, the Court set aside the Tribunal's order and remanded the case for a fresh consideration on whether the 311-day delay was justified. The Court concluded by allowing the appeals without costs and closing related petitions.