2022 (3) TMI 321 - HC - Central Excise

Maintainability of appeal - applicability of time limitation for preferring an appeal - proper service of the impugned order or not - HELD THAT - From a bare perusal of Sub-section (3A) of Section 85 of the Act 1994, it is luminescent, that an appeal shall be presented within two months from the date of receipt of the decision or order of such adjudicating authority, made on and after the Finance Bill, 2012 relating to service tax, interest or penalty under this Chapter. The proviso attached to sub-section (3A) provides, that if the Commissioner of Central Excise (Appeals) is satisfied that the appeal was presented by sufficient cause from presenting the appeal within the aforesaid period of two months, allow it to be presented within a further period of one month. Thus, the total period, including the extended period to prefer an appeal under Section 85 of the Act 1994, is three months. The provisions of Section 85 nowhere states that limitation shall commence from the date when the order is served upon the person concerned or his authorized agent. There is no dispute to the fact that the order passed by the Original Authority/Assessing Authority was issued against the petitioner and accordingly, description of the petitioner was styled as name of the parties in the order itself. Secondly, the order was required to be served upon the petitioner in terms of Clauses (1) and (3) of the instructions contained in the order dated 31- 01-2018 - Apparently, the respondent does not dispute that the order of the Original Authority/Assessing Authority was not served upon the petitioner and there is no material on record to show that the impugned order dated 31-01- 2018 was ever served upon the petitioner. On the contrary, on the strength of the endorsement made at the bottom of the order dated 31-01-2018, it is stated that the same was received by Manoj Kumar Shrivastava on 11-4-2018, who was the legal representative of the petitioner. Thus, apparently there was no proper service of the impugned order dated 31-01-2018 passed by the Original Authority/Assessing Authority upon the petitioner, so as to enable him to prefer an appeal before the Commissioner of Central Excise (Appeals) in accordance with Section 85 of the Act 1994. The Hon ble Supreme Court in catena of decisions has categorically held, that the rules of limitation are not meant to destroy the rights of the parties. The Courts are only required to ensure that, a litigant has not to take resort to dilatory tactics and has approached the Court bonafidely. The matter is remitted back to the Commissioner (Appeals) CGST, Customs Central Excise, Bhopal to decide the appeals on merits in accordance with law, by affording proper opportunity of hearing to the petitioners - Petition allowed.

Summary

Issues Involved:
1. Validity of the service of the order by the Original Authority/Assessing Authority.
2. Bar of limitation in filing the appeal before the Commissioner (Appeals).
3. Validity of the orders passed by the Commissioner (Appeals) and the Tribunal.

Issue-wise Detailed Analysis:

1. Validity of the service of the order by the Original Authority/Assessing Authority:
The petitioner contended that the order dated 31-01-2018 by the Original Authority/Assessing Authority was not communicated to him but to one Manoj Kumar Shrivastava, who was neither an employee nor known to the petitioner. The respondent argued that Manoj Kumar Shrivastava was the legal representative of the petitioner and hence, the service of the order upon him on 11-04-2018 was valid. The court examined Section 37C(1)(a) of the Central Excise Act, 1944, which mandates that service of decisions, orders, summons, etc., must be made to the person for whom it is intended or his authorized agent. The court found no evidence or document proving that Manoj Kumar Shrivastava was authorized by the petitioner to receive the order, thus deeming the service improper.

2. Bar of limitation in filing the appeal before the Commissioner (Appeals):
The petitioner filed an appeal on 30-07-2018, which was dismissed by the Commissioner (Appeals) on the ground of being barred by limitation. According to Section 85 of the Finance Act, 1994, an appeal must be filed within two months from the date of receipt of the decision, with a possible extension of one month. The court noted that since the service of the order was not properly made to the petitioner, the limitation period did not commence. Hence, the appeal filed by the petitioner was within the prescribed time limit.

3. Validity of the orders passed by the Commissioner (Appeals) and the Tribunal:
The court observed that both the Commissioner (Appeals) and the Tribunal dismissed the appeals based on the incorrect assumption that the order was properly served and the appeal was time-barred. Given the improper service of the order, the court found the dismissal of the appeals unsustainable. The court referred to the Supreme Court's decision in N. Balakrishnan vs. M. Krishnamurthy, emphasizing that rules of limitation should not destroy the rights of parties and courts should show consideration if the explanation for delay is satisfactory and not mala fide.

Conclusion:
The court quashed the impugned orders dated 31-08-2018 and 12-03-2021, passed by the Commissioner (Appeals) and the Tribunal, respectively. The matter was remitted back to the Commissioner (Appeals) CGST, Customs & Central Excise, Bhopal, to decide the appeals on merits after affording proper opportunity of hearing to the petitioners. The court clarified that it had not expressed any opinion on the merits of the case and allowed the writ petitions without any order as to costs.