2022 (5) TMI 478 - AT - Service Tax

Rectification of mistake - error apparent on the face of record - Maintainability of appeal - rejection on the ground of time limitation - appeal was filed before Commissioner (Appeals) who has rejected the same as being filed beyond a period of three month (two months plus one condonable month), from the date of the original order - rectification of mistake - Whether it is 22.11.2019 the date of order in original or it is 06.10.2020 the date when the original authority communicated the order rejecting the ROM dated 06.10.2020 to the present appellant to be the relevant date under section 85(3A) of the Finance Act 1994 for period of two months therein to reckon? HELD THAT - Perusal of the provision of section 74 of the Finance Act 1994, makes it clear that after an ROM has been filed the order wherein the mistake has been alleged can be amended in any possible way, as mentioned in the above provision, depending upon the facts of each case. This particular perusal is sufficient for me to hold that once an application for rectification of mistake has been adjudicated by the original adjudicating authority on the merits, the final order of original adjudicating authority irrespective that ROM was rejected or allowed, i.e. irrespective that the original order was amended or not, the date for original order to attain finality is the date of the order of the said ROM application. The perusal makes it clear that the appellant-assessee had since paid certain amount of tax and the demand was raised on the gross amount that the absence of the benefit of cum tax was alleged to be an error apparent on record - the submission of the learned DR that the prayer in the application was such which could be raised before the appellate authority as above plea is held to have justifiably been raised by the original adjudicating authority only, cannot be agreed upon. Thus, the relevant date for a period of two months to reckon in terms of section 85 of the Finance Act 1994 is the date when the original adjudicating authority after deciding the application praying for rectification of mistake in the original order passed by the said Original Adjudication order and communicated the same to the said applicant - in view of the adjudication since the relevant dated is held to be 06.10.2020 when the order about ROM application was communicated to the appellant. Admittedly the appeal before the Commissioner (Appeals) was filed on 07.12.2020, it becomes clear that the appeal was filed within the period of two months required to be calculated for filing the appeal before Commissioner (Appeals) (date of order has to be excluded in terms of the provisions of General Clause Act Section 9). In view of the entire discussion the findings of Commissioner (Appeals) while rejecting the appeal before him on the grounds of limitation are held absolutely wrong. The order is thereby set aside. However, since the order was on the technical ground of limitation, Commissioner (Appeals) is required to precisely and properly adjudicate the same on the merits of the case. Accordingly the matter is remanded back to the Commissioner (Appeals) for adjudication of merits. The appeal stands allowed by way of remand.

Summary

Issues Involved:
1. Whether the appeal was filed within the prescribed period of limitation.
2. Consideration of the rectification of mistake (ROM) application.
3. Determination of the relevant date for computing the period of limitation under Section 85(3A) of the Finance Act, 1994.

Issue-wise Detailed Analysis:

1. Whether the appeal was filed within the prescribed period of limitation:
The appellant challenged the Order-in-Appeal No. 169/2021 dated 28.07.2021, which rejected the appeal against the Order-in-Original on the grounds of being time-barred. The appellant argued that the appeal was filed within two months from the date of rejection of the ROM application (06.10.2020), not from the date of the original order (22.11.2019). The Tribunal observed that the Commissioner (Appeals) incorrectly considered the date of the Order-in-Original for calculating the appeal period, instead of the date of the ROM rejection.

2. Consideration of the rectification of mistake (ROM) application:
The appellant filed an application for rectification of mistake on 06.10.2020, which was rejected on the same date. The appellant contended that the original Adjudicating Authority passed an ex-parte order despite the appellant submitting a detailed reply to the show cause notice. The Tribunal noted that the application pointed out apparent errors, such as the failure to consider the written submissions and the incorrect classification of the appellant under Goods Transport Agency. The Tribunal held that once an ROM application is adjudicated, the relevant date for the original order to attain finality is the date of the ROM decision.

3. Determination of the relevant date for computing the period of limitation under Section 85(3A) of the Finance Act, 1994:
The Tribunal emphasized that the relevant date for computing the period of two months for filing an appeal should be the date when the ROM application was decided, not the date of the original order. This interpretation aligns with Section 74 of the Finance Act, 1994, which allows for rectification of mistakes within two years. The Tribunal cited precedents, including the case of United Corporation v. Comm of C. Ex Chandigarh, which supported this view. Consequently, the Tribunal held that the appeal filed on 07.12.2020 was within the prescribed period, as it was filed within two months from the ROM decision date (06.10.2020).

Conclusion:
The Tribunal concluded that the Commissioner (Appeals) erred in rejecting the appeal on the grounds of limitation. The order was set aside, and the matter was remanded back to the Commissioner (Appeals) for adjudication on merits, as the appeal was filed within the permissible period. The Tribunal's decision underscores the importance of considering the ROM decision date for computing the limitation period under Section 85 of the Finance Act, 1994.