2021 (8) TMI 1161 - AT - Service Tax

Delay in filing of appeal before the Commissioner (Appeals) - Non-Receipt of Order-in-original - Recovery of service tax - Even the SCN also not come to the notice of the appellant till the recovery proceedings were initiated against him - principles of natural justice - HELD THAT - It is apparent that the appellant could not appear before the Original Adjudicating Authority despite three opportunities for hearing was afforded to the appellant. But from the arguments of the appellant, it is coming apparent that appellant in-fact, was not served with even with the copy of Show Cause Notice which became the reason for him to not to appear before the Original Adjudicating Authority and the same was the reason for acquiring no knowledge of Order-in-Original dated 16.11.2018 till the recovery proceedings got initiated against the appellant. The affidavit to this effect is placed on record. Mere dispatch of the order cannot be considered as service. The period of 2 months for filing the appeal has to reckon not from the date of order announced but from the date of receipt of said order by the assessee in terms of Section 35 of Central Excise Act, 1944. Section 37 C further provided the mode of service. In view of those statutory provisions, it is not held appropriate to consider the proof of dispatch as sufficient proof of service - the circumstances reflect no fault on part of the appellant for while approaching Commissioner (Appeals) with his grievance. Since admittedly no acknowledgement receipt was received by the Revenue, question of the production thereof on the record does not at all arise - there are no option but to hold that the Original Adjudication order was not received by the appellant prior to 20th February, 2019. The appeal filed before Commissioner (Appeals) on 18.04.2019 was very-much within the period of two months as is required under section 35 of Central Excise Act. Commissioner (Appeals) definitely erred while rejecting the appeal on the ground of being barred by time. Appeal allowed by way of remand.

Summary

Issues:
- Appeal against dismissal based on time limitation

Analysis:
The appeal in question was filed to challenge the Order-in-Appeal No. 107/ST dated 5.3.2020, which dismissed the appellant's appeal against the Order in Original No. 69/2018 dated 16.11.2018 on the grounds of being time-barred. The appellant, registered for providing man-power recruitment/supply agency service, argued that they did not receive the Show Cause Notice until after the Order-in-Original was passed against them. The appellant claimed that they only became aware of the order when recovery proceedings were initiated, and they subsequently filed an appeal within two months of receiving the copy of the Order-in-Original. The appellant contended that the appeal should not have been rejected as time-barred. The Department, represented by the learned Authorized Representative, emphasized the findings in the Order-in-Appeal, which were based on a report from the Jurisdictional Assistant Commissioner indicating the dispatch of the Order-in-Original on the date of the order itself.

Upon hearing both parties and examining the record, the Member (Judicial) noted that the appellant did not appear before the Original Adjudicating Authority despite being afforded three opportunities for a hearing. However, it was revealed that the appellant had not been served with even a copy of the Show Cause Notice, which led to their non-appearance and lack of knowledge about the Order-in-Original until recovery proceedings commenced. The affidavit supporting this claim was presented. The Member also considered a letter from the Department dated 20th February, 2019, responding to the appellant's request for a copy of the Order-in-Original, which confirmed that the copy was provided on that date. The Member found no reason to doubt the appellant's deposition, especially since the report relied upon by the Commissioner (Appeals) did not provide concrete evidence of the Order-in-Original being served on the appellant.

The Member emphasized that dispatching an order does not equate to service, citing statutory provisions under the Central Excise Act, 1944. Referring to a decision by the Hon'ble High Court of Madras, it was highlighted that it is essential for the appellate authority to verify whether the order was received by the assessee. The Member also referenced a Tribunal decision from Chennai, emphasizing that the appellant should not suffer for a fault not on their part. As no acknowledgment receipt was received by the Revenue, the Member concluded that the Original Adjudication order was not received by the appellant before 20th February, 2019. Therefore, the appeal filed on 18th April, 2019, was within the required two-month period, and the Commissioner (Appeals) erred in rejecting it as time-barred. Consequently, the order was set aside, and the Commissioner (Appeal) was directed to decide the matter on its merits, allowing the appeal by way of remand.