2017 (10) TMI 210 - AT - Service Tax

Rectification of mistake - Section 74 of Finance Act, 1994 - time limitation - first appellate authority rejected/dismissed the appeal holding that appeal was filed beyond period of limitation i.e. sixty days and further 30 days from the date of issue of Order-in-Appeal i.e. 20.11.2011 - Held that - the findings of the first appellate authority seems to be erroneous as the provision of Section 74 of the Finance Act, 1994 mandates that assessee can prefer an application for Rectification of Mistake within a period of two years from the date of issuance of impugned order - the period of limitation will start from the date when an assessee receives an order/letter informing the view of the Revenue on the application made under section 74 of Finance Act, 1994. The impugned order which has dismissed the appeal only on limitation, is unsustainable and liable to be set side - matter is remitted to first appellate authority with direction to restore the appeal to its original number - appeal restored.

Summary

Issues involved: Appeal against Order-in-Appeal No. 18/2013, Rectification of mistake application under Section 74 of Finance Act, 1994, Limitation period for filing appeal.

Analysis:

1. Rectification of Mistake Application: The appellant filed a rectification of mistake application under Section 74 of the Finance Act, 1994, against the demand raised by the adjudicating authority. The application was submitted within the prescribed period of two years from the date of the original order. The adjudicating authority responded to the application stating that there was no error in the original order. Subsequently, the appellant filed an appeal before the first appellate authority challenging the original order based on the rectification of mistake application.

2. Limitation Period for Filing Appeal: The first appellate authority rejected the appeal on the grounds of being time-barred, stating that it was filed beyond the sixty-day limitation period from the date of the original order. However, the appellate tribunal disagreed with this finding, emphasizing that as per Section 74 of the Finance Act, 1994, the assessee has a two-year period from the issuance of the impugned order to file for rectification of mistake. The tribunal highlighted that the limitation period commences from the date the assessee receives the order or letter informing the Revenue's view on the rectification application.

3. Decision and Disposition: The tribunal found the first appellate authority's decision to dismiss the appeal solely on the grounds of limitation as unsustainable. The tribunal set aside the impugned order and remitted the matter back to the first appellate authority with directions to restore the appeal to its original status and decide the case on its merits, ensuring the principles of natural justice are followed. Consequently, the appeal was disposed of accordingly, and the stay application was also disposed of by the tribunal.

In conclusion, the appellate tribunal's judgment in this case focused on the correct interpretation of the limitation period for filing appeals under the Finance Act, 1994, and emphasized the importance of allowing a reasonable time frame for rectification of mistake applications. The tribunal's decision to set aside the impugned order and remit the matter for a fresh decision underscores the significance of procedural fairness and adherence to statutory timelines in tax matters.