2015 (10) TMI 1112 - HC - Service Tax

Rejection appeals as time barred by the tribunal - Delivery of order by speed post - Proof and date of delivery - Service tax demanded on charges paid by Railways to Appellant towards rendering of customer care service - Business Auxiliary Service Order passed to pay 25% of tax as pre-deposit - Appeal dismissed on the ground of delay; Department did not complied with Section 37C(1)(a) of the Central Excise Act. Held That - From 10-05-2013, Section 37C(1)(a) mentions speed post as one of the modes of service and same should be supported by proof of delivery and the same cannot be treated as service for reckoning the period of limitation - No proof having been filed to support such delivery, which is the mandatory requirement as per Section 37C(1)(a) Question of delay does not arise as the appeal is filed within time - appeal restored before the tribunal Appeal allowed in favour of the Appellant.

Summary

Issues:
1. Dismissal of appeals by Tribunal
2. Service tax demand on hire charges
3. Delay in filing appeals
4. Compliance with statutory norms

Issue 1: Dismissal of appeals by Tribunal
The appellant, a garment processing unit, was awarded a contract by the Southern Railway. A show cause notice was issued demanding service tax on hire charges paid by the railways to the appellant. The Commissioner confirmed the proposal, leading to appeals before the Tribunal. The Tribunal dismissed the appeals as time-barred based on the date of service of order, prompting the appellant to challenge this decision.

Issue 2: Service tax demand on hire charges
The appellant contended that the notice of the Commissioner's order was dispatched via speed post on 9-5-2011, but actual receipt was on 23-12-2011. The appellant argued that prior to 10-5-2013, service through speed post was not a recognized mode, making the notice invalid for calculating the limitation period. The appellant emphasized that proof of delivery is crucial for effective service.

Issue 3: Delay in filing appeals
The appellant filed appeals before the Tribunal on 4-1-2012, within the limitation period from the date of actual receipt of the order. The Court noted that the service through speed post lacked proof of delivery and, therefore, could not be considered valid for calculating the limitation period. The Court held that the appeals were filed in time, and the question of delay did not arise.

Issue 4: Compliance with statutory norms
The Court analyzed Section 37C(1)(a) of the Central Excise Act, emphasizing that prior to 10-5-2013, service through speed post was not a recognized mode. The Court highlighted the importance of proof of delivery for service through speed post, which was absent in this case. The Court concluded that the service of notice did not comply with statutory norms, leading to the dismissal of the appeals by the Tribunal being set aside.

The Court allowed the appeals, directing the Tribunal to consider them on merits and in accordance with the law. The Court ruled in favor of the appellant/assessee, emphasizing the importance of proper service and adherence to statutory norms in legal proceedings.