2017 (6) TMI 279 - HC - Service Tax

Maintainability of appeal - time limitation - delay in collection of pre-deposit - Held that - The petitioner is a creature of a statute and is bound to provide security to Government Institutions. Petitioner has also relied upon various decisions of different Tribunals where the petitioner was not liable to pay service tax. Considering the nature of service being provided by the petitioner, the learned counsel for the petitioner Sri Aditya Kumar, would argue that he has a very good case on merit and the reason for filing the appeal belatedly was that there is a statutory provision of depositing 7.5% of the amount, which could not be collected in time - the delay was bonafide - matter is remanded back to the concerned authority, to consider the matter afresh - petition allowed by way of remand.

Summary

Issues:
Challenge to order dismissing appeal on grounds of limitation under Central Excise Act - Interpretation of Section 85(3-A) of the Finance Act - Power of Commissioner (Appeals) to condone delay - Alternative remedy under Section 86 of the Finance Act.

Analysis:
The petitioner challenged the order of the Commissioner (Appeals) dismissing the appeal on the grounds of limitation. The petitioner, an assessee under the Central Excise Act, was held liable to pay service tax for services provided to a corporation. The Joint Commissioner ordered the petitioner to pay service tax, penalty, and interest, which was challenged before the Commissioner (Appeals) beyond the two-month limitation period, resulting in a delay of 103 days.

Section 85(3-A) of the Finance Act was deemed relevant, stating that an appeal must be filed within two months of the decision, with a provision allowing a further one-month extension for sufficient cause. However, the Commissioner (Appeals) lacks the authority to condone delays exceeding 90 days, as per the provision.

The petitioner contended that the delay in filing the appeal was due to the statutory requirement of depositing a certain amount, which was delayed but eventually deposited with the appellate authority. The petitioner argued a strong case on merit, citing past tribunal decisions where they were not liable to pay service tax. On the other hand, the respondent highlighted the alternative remedy available under Section 86 of the Finance Act for filing an appeal.

After hearing both parties, the Court considered the delay as bona fide and in the interest of justice, set aside the order of 18.02.2016, and remanded the matter back to the concerned authority for fresh consideration on its merits. The Court emphasized the need for adjudication on merit due to the peculiar circumstances of the case, allowing the writ petition.