2020 (12) TMI 1017 - AT - Service Tax

Condonation of delay in filing appeal - recovery of CENVAT Credit - construction services other than residential complex - HELD THAT - It is a fact that the appellant had taken loan from the banks and ultimately the loan was declared as NPA and proceedings were initiated against the appellant under the provisions of the SARFAESI Act. Possession was also taken by the bank on July 26, 2013. After the impugned order was passed by the Commissioner on February 10, 2014, the appellant has reversed the CENVAT credit. It also needs to be noticed that the mall was ultimately auctioned by J.M. Financial Assets Reconstruction Company. It also transpire from the records that the Department had written letters to J.M. Financial Assets Reconstruction Company and the auction purchaser for compliance of the order passed by the Commissioner. The appellant in the present appeal has satisfactorily explained the delay in filing the appeal. The delay condonation application is allowed subject to payment of cost of ₹ 25,000/-, which the appellant shall deposit within the period of one month from today in the Prime Minister s CARES Fund - matter shall be listed on January 8, 2021 for a report regarding compliance of the order.

Summary

Issues:
Delay in filing appeal for condonation, disallowance of CENVAT credit, recovery order, penalty imposition.

Analysis:
The appeal was filed against an order disallowing CENVAT credit of ?10,21,04,601 and ordering its recovery from the appellant along with a penalty under the Credit Rules and Finance Act. The delay in filing the appeal was explained due to various events, including possession of the mall by the bank, reversal of CENVAT credit, and subsequent auction of the mall by a financial assets reconstruction company. The appellant believed there was no need for an appeal until a writ petition was filed against it, prompting the appeal before the Tribunal.

The Department argued against the delay condonation, citing previous judgments where delays were not condoned. However, the Tribunal noted the unique circumstances of the case, including the reversal of credit, communications with the financial assets reconstruction company, and the auction purchaser. The Tribunal found the appellant's explanation for the delay satisfactory, unlike the cases cited by the Department, where delays were not adequately justified.

The Tribunal differentiated the present case from previous judgments, emphasizing the appellant's satisfactory explanation for the delay. Ultimately, the delay condonation application was allowed, subject to a cost of ?25,000 to be deposited in the Prime Minister's CARES Fund within a month. The matter was scheduled for a compliance report on January 8, 2021, following the order's implementation.