2022 (3) TMI 591 - AT - Service Tax

Period of limitation for filing an appeal before Commissioner (appeals) - SCN was never received by the appellant nor even the Order-in-Original was received - Violation of principles of natural justice - Recovery of short duty alongwith interest and penalty - applicability of time limitation - HELD THAT - Perusal of section 84 (sub section 2) of Finance Act makes it clear that the time period available with the assessee to file the appeal before Commissioner (Appeals) against the Order-in-Original is the period of three months from the date when he received the decision which was challenged before Commissioner (Appeals), instead of date of Order-in- Original itself. No doubt the Order-in-Original as was challenged before the Commissioner (Appeals) is dated 16.10.2019 but as already observed above, admittedly it was passed in the absence of appellants. From the documents on record it is apparent that copy of the said order was received by the appellant only on 25.9.2020. There is no denial apparent on record to falsify this date of receipt and that the Show cause notice was not received by the appellant. The department has not produced any proof of service of said Show cause notice - the Order-in-Original was not received by the appellant immediately after it was pronounced, it being served on the wrong address not pertaining to the appellant. The certified copy of order thereof was received by the appellant only on 25.9.2020. The appeal before Commissioner (Appeals) was apparently filed on 9.11.2020. i.e very much within the time limit prescribed by section 84 of the Finance Act (as reproduced above). Resultantly, the first point of adjudication is answered in affirmative in favour of the appellant. Principles of natural justice - opportunity of hearing not provided - HELD THAT - It becomes clear that no opportunity of hearing was provided to the appellant to put forth his defence. First principle of natural justice i.e. Audi Alteram Partem, is not followed by Adjudicating Authority. The appellant had no opportunity to make himself available before the concerned authorities to put forth his stand. The authorities have wrongly issued a show cause notice at the wrong address. It was the recovery notice which was served on wrong address as well as registered address, accordingly was received by the appellant. Immediately thereof the appellant made representation before the Department on 04.09.2020 i.e. much prior to the order passed by the Commissioner (Appeals). Still his representation was not at all considered by the adjudicating authorities below. The department has not produced any evidence about service of Order-in-Original on appellant on any date prior to the aforesaid date of receipt of said order. Order of Commissioner (Appeals) is miserably silent about the receipt of certified copy of Order under challenge before him on 25.9.2020. Had the said fact being considered by Commissioner (Appeals), he could have rightly appreciated the appeal to have been filed within the statutory period for the same. The absence thereof is sufficient violation of aforesaid principles of nature justice. The appeal filed before the Commissioner (Appeals) was filed within two months of date receipt of Order-in-Original by the appellant. Commissioner (Appeals) has wrongly held the same to be barred by time - appeal allowed by way of remand.

Summary

Issues:
1. Timeliness of filing the appeal before the Commissioner (Appeals)
2. Availability of sufficient opportunity of hearing for the appellant

Issue 1: Timeliness of filing the appeal before the Commissioner (Appeals)

The appellant, engaged in providing manpower services, was issued a demand notice for short payment of Service Tax. The appellant claimed that the show cause notice and Order-in-Original were not received by them as they were sent to an address different from the registered one. The appellant only became aware of the order after receiving a recovery notice on 27.8.2020. The appellant filed an appeal on 9.11.2020, within the three-month limitation period from the date of receiving the order. The Tribunal found that the appellant was not served the show cause notice and Order-in-Original promptly, as required by law. The Tribunal cited legal precedents to support the appellant's claim that the appeal was filed within the prescribed time limit. Consequently, the first issue was decided in favor of the appellant.

Issue 2: Availability of sufficient opportunity of hearing for the appellant

The Tribunal noted that the appellant was not provided with an opportunity to present their defense before the authorities, violating the principles of natural justice. The show cause notice was incorrectly served at an address different from the registered one. The appellant promptly informed the department about the incorrect address upon receiving the recovery notice. However, the authorities failed to consider the appellant's representation. The Tribunal emphasized that the appellant had no chance to be heard before the adjudicating authorities. The Commissioner (Appeals) wrongly held the appeal to be time-barred without considering the appellant's situation. As a result, the second issue was also decided in favor of the appellant.

In conclusion, the Tribunal set aside the order under challenge, directing the Commissioner (Appeals) to decide the matter on its merits. The appellant was instructed to be given sufficient opportunity for a hearing, and the Commissioner (Appeals) was directed to adjudicate the matter within three months from the receipt of the impugned order. The appeal was allowed by way of remand, ensuring that the appellant's rights to a fair hearing and timely appeal filing were upheld.