2021 (10) TMI 193 - HC - Service Tax

Condonation of delay of 815 days in filing appeal - initially the appeal was filed before wrong forum, after knowing the facts, the appeal was filed before right forum after such huge delay - Short payment/non-payment of service tax - business auxiliary services - security service under reverse charge mechanism - renting immovable property service - repair, reconditioning, restoration and other similar service - freight charges paid under reverse charge mechanism - reversal of proportionate cenvat credit u/r 6(3) of Cenvat Credit Rules, 2004 - HELD THAT - Admittedly, the order in original was passed on 30.08.2018, of course, after giving due opportunity to the petitioner, which the petitioner cannot deny. On receipt of the order in original on 04.09.2018, prerequisite deposit of 7.5% of demanded tax was paid by the petitioner on 20.09.2018, that is, within 15 days, based on which, it is claimed by the petitioner that, the appeal papers have been prepared and sent, instead of Appellate Authority, it was sent to the Original Authority, that is, the Assessing Authority. If at all the petitioner had no intention to prefer an appeal within the time prescribed, in this regard, he would not have come forward to make pre-requisite deposit of 7.5% of demanded tax and this has been admittedly done by the petitioner. No doubt, in view of the statutory limitation prescribed, the Appellate Authority can not condone such a huge delay and therefore the reason stated by the Appellate Authority, in this regard, to that extent can be accepted. Further, it is to be taken note of that, the petitioner had paid the pre-requisite deposit of 7.5% of demanded tax, in this context, though he made an attempt to file an appeal, but he had chosen the wrong Forum by mistake or by mis-conception of the Forum, due to various reasons at the end of the assessee side. In view of the said factual circumstances, this Court feel that in such peculiar circumstances, the appeal filed by the petitioner can be entertained by the Appellate Authority. This Court by exercising its extraordinary power under Article 226 of the Constitution of India, can very well condone the delay in filing the appeal before the Appellate Authority for the very peculiar reasons. There shall be a direction to the second respondent/Appellate Authority, to entertain the appeal filed by the petitioner as against the order-in-original, made by the first respondent, and accordingly decide the said appeal on merits and in accordance with law - Petition disposed off.

Summary

Issues:
1. Delay in filing appeal before the Appellate Authority.
2. Jurisdiction of the Appellate Authority to condone the delay.
3. Request for Certiorarified Mandamus to quash the original order and appeal order.

Analysis:
1. The petitioner received a show cause notice for non-payment of service tax and other related charges. The Assessing Authority passed an order in original on 30.08.2018. The petitioner claimed to have filed an appeal but mistakenly sent it to the wrong authority, resulting in a delay of 815 days in filing the appeal before the Appellate Authority.

2. The Appellate Authority rejected the appeal citing Section 85(3) of the Finance Act, which mandates a time limit for filing appeals related to service tax. The Appellate Authority held that it lacked the power to condone the delay of 815 days, leading to the petitioner filing a Writ Petition seeking to challenge the original order dated 30.08.2018.

3. The petitioner argued that the delay was inadvertent and due to a mistake made by inexperienced staff. The petitioner contended that the appeal should be considered by the Appellate Authority despite the delay. The Respondent, standing counsel, maintained that the appeal was not filed within the statutory time limit and, therefore, should not be entertained due to the delay.

4. The Court acknowledged that the petitioner had paid the required deposit promptly after receiving the original order, indicating an intention to appeal. Considering the circumstances and the petitioner's efforts to rectify the mistake by filing a fresh appeal, the Court exercised its extraordinary power under Article 226 of the Constitution of India to condone the delay and directed the Appellate Authority to entertain and decide the appeal on its merits.

5. The Court disposed of the Writ Petition with a direction to the Appellate Authority to entertain the appeal filed by the petitioner against the original order dated 30.08.2018 and decide the appeal on its merits and in accordance with the law. The challenge against the original order in the Writ Petition was not pursued further, and the petitioner was instructed to request the Appellate Authority to proceed with the appeal based on the Court's order.