2025 (4) TMI 1065 - AT - Service Tax

Condonation of delay in filing the appeal before the Commissioner (Appeal) - power of Commissioner (Appeals) to condone delay beyond the prescribed period - HELD THAT - It is observed that the appeal was to be filed before the Commissioner (Appeal) within two months of the date of the receipt of the Order-in-Original by the appellant. As per the proviso Commissioner (Appeal) has been granted the power to condone delay of one month in filing the appeal on sufficient cause being shown. In the present case appeal was filed before the Commissioner (Appeal) after more than three months from the date of receipt of Order-in-Original. Hence Commissioner (Appeal) has rightly held that appeal was filed beyond the prescribed period of limitation and has dismissed the same on this ground alone. This issue is squarely covered by the decision of Hon ble Supreme Court in the case of SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX. JAMSHEDPUR 2007 (12) TMI 11 - SUPREME COURT wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him. Conclusion - Admittedly the appeal has been filed beyond the period which could have been condoned by the Commissioner (Appeal). Hence present case is squarely covered by the decision of Hon ble Supreme Court in case of Singh Enterprises. There are no merits in this appeal filed by the appellant - appeal dismissed.

Summary

The core legal questions considered in this judgment revolve around the limitation period for filing an appeal before the Commissioner (Appeals) under the Finance Act, 1994, specifically Section 85(3A), and the scope of the power vested in the Commissioner (Appeals) to condone delay beyond the prescribed period. The issues include:

1. Whether the appeal filed beyond the prescribed two-month period (plus an additional one month condonation period) under Section 85(3A) of the Finance Act, 1994, is maintainable.

2. The extent of the Commissioner (Appeals)' power to condone delay in filing appeals, particularly whether delay beyond one month after the initial two-month limitation can be condoned.

3. The applicability and scope of judicial precedents, including the Supreme Court decision in M/s Singh Enterprises, in interpreting the limitation provisions and condonation powers.

4. The relevance and applicability of decisions from various High Courts and other tribunals which have allowed condonation of delay or remanded matters for merits despite delay.

5. Whether the facts of the present case justify condonation of delay or dismissal on limitation grounds.

Issue-wise Detailed Analysis

1. Limitation Period for Filing Appeal and Power to Condon Delay

The relevant statutory provision is Section 85(3A) of the Finance Act, 1994, which mandates that an appeal to the Commissioner (Appeals) must be filed within two months from the date of receipt of the adjudicating authority's order. The proviso empowers the Commissioner (Appeals) to condone delay of up to one additional month if "sufficient cause" is shown for the delay beyond two months.

The Court examined the timeline in the present case: the appellant received the order on 17.05.2022 but filed the appeal on 29.03.2023, which is over 10 months later, exceeding even the extended one-month condonation period.

The Court relied heavily on the Supreme Court's ruling in M/s Singh Enterprises, which held that the appellate authority's power to condone delay is strictly limited to the statutory period prescribed (30 days beyond the initial 60 days in that case). The Supreme Court emphasized that the appellate authority, being a creature of statute, cannot extend limitation periods beyond what the statute allows, and Section 5 of the Limitation Act does not apply to extend these periods.

The Court reproduced key excerpts from the Singh Enterprises judgment, underscoring that the legislature's language is "crystal clear" that condonation beyond the prescribed period is impermissible, and that allowing such would render the statutory limitation provision otiose.

Applying this legal framework to the facts, the Court found the appeal was barred by limitation and rightly dismissed by the Commissioner (Appeals).

2. Treatment of Competing Authorities and Precedents Favoring Condonation or Merits Consideration

The appellant relied on various High Court and tribunal decisions where appeals were remanded for merits or delay was condoned despite statutory limitation, including Raj Construction Co, Citrix Systems Pvt Ltd, Jalpaiguri Central Engineers Cooperative Society Ltd, Central Industrial Security Force, and M Thiagarajan.

The Court analyzed these decisions and distinguished them on factual and procedural grounds. It noted that many of these decisions arose from writ petitions where the High Courts exercised their broader jurisdiction beyond statutory appellate proceedings, allowing them to relax limitation rules for substantial justice. Such powers are not available to the Commissioner (Appeals) or the Tribunal, which are bound by the statute.

For instance, in Raj Construction Co, the delay was within the condonable period and the dispute centered on the date of receipt of the order. The Commissioner (Appeals) had rejected the appellant's claimed date without inquiry. The Tribunal condoned the delay after accepting the appellant's evidence. This case was found distinguishable because in the present matter, there was no dispute about the date of receipt, and the delay exceeded the condonable limit.

Similarly, Citrix Systems involved delay within the condonable period, and the Commissioner (Appeals) had condoned delay due to inadvertent internal miscommunication. The present case, involving delay beyond the statutory condonable period, was held to be clearly different.

The Court further cited the Calcutta High Court's decision in Universal Paper Mills Ltd, which emphasized that Supreme Court and High Court orders condoning delay in writ jurisdiction do not bind appellate authorities who must strictly apply statutory limitation provisions.

The Court also referred to the Supreme Court's recent ruling in Pathapati Subba Reddy, which reiterated the principles that limitation laws are based on public policy to end litigation, that condonation of delay is discretionary and must be exercised cautiously, and that merits of the case are irrelevant in condonation applications.

3. Application of Law to Facts and Final Determination

The Court found no sufficient cause to justify condonation of delay beyond the one-month period allowed under the proviso to Section 85(3A). The appellant had not disputed the date of receipt of the order, and the delay of over 10 months was excessive and unexplained to the Court's satisfaction.

The Court rejected the appellant's reliance on decisions allowing condonation beyond statutory limits, explaining that those decisions were either factually distinguishable or involved different legal contexts (e.g., writ jurisdiction).

The Court concluded that the appeal was time barred and not maintainable, affirming the dismissal by the Commissioner (Appeals).

Significant Holdings

"The proviso to sub-section (1) of Section 35 ibid makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days. The language used makes the position clear that the legislature intended the appellate authority to entertain the appeal by condoning delay only upto 30 days after the expiry of 60 days which is the normal period for preferring appeal. Therefore, there is complete exclusion of Section 5 of the Limitation Act."

"The Commissioner (Appeals) and the Tribunal being creatures of Statute are vested with jurisdiction to condone the delay beyond the permissible period provided under the Statute. The period upto which the prayer for condonation can be accepted is statutorily provided."

"No law declared in the impugned decision to the effect that Supreme Court can direct condonation even when the statute prescribed particular period of limitation. Such stand would render specific provision providing for limitation rather otiose."

"Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself."

"Merits of the case are not required to be considered in condoning the delay."

"The appeal filed beyond the prescribed time limit is time barred and as such, is liable for dismissal."

The Court's final determination was that the appeal was barred by limitation as per Section 85(3A) of the Finance Act, 1994, and the Commissioner (Appeals) was correct in dismissing the appeal on this ground. The power to condone delay is strictly limited to one month beyond the initial two-month period, and no further extension is permissible. The appellant's reliance on decisions allowing condonation beyond statutory limits was rejected as not applicable in the present statutory appellate context.