HIGH COURT OF PUNJAB AND HARYANA
Lakshmi Printing Co.
Commissioner of Central Excise
CEA NO. 19 OF 2012
Date of Pronouncement – 15.01.2013
1. Challenge in the present appeal is to an order passed by the Customs Excise and Service Tax Appellate Tribunal (for short the ‘Tribunal’) on 20.10.2011 (Annexure A-7) whereby an application for condonation of delay of six years was dismissed.
2. The appellant has raised the following substantial questions of law for consideration in the present appeal: –
(I) Whether the impugned order is perverse and contrary to the record?
(II) Whether the learned Tribunal was justified to dismiss the application for condonation of delay and main appeal when there is no delay in filing the appeal and there is no prescribed period of refiling the appeal?
(III) Whether the Tribunal could dismiss the appeal when defect memos were returned back to the registry?
3. The said questions are said to be arising in the following circumstances. The Central Excise Commissionerate, Amritsar passed an order on 28.02.2004 (Annexure A-1) confirming the demand of Rs. 54,348/-and also imposed penalty of the equivalent amount. An appeal against the said order was dismissed on 23.3.2005 (Annexure A-3) for the reason that the appellant failed to comply with the condition of pre-deposit in terms of section 35F of the Central Excise Act, 1944 (for short the ‘Act’). The appellant filed an appeal which was returned three times with defect memos dated 22.3.2005, 30.6.2005 and 22.9.2005.
4. The appellant, thereafter, filed an appeal along with an application for condonation of delay. It is the said application, which has been declined by the Tribunal vide the order impugned in the present appeal.
5. Learned counsel for the appellant contends that the defect memos were not received by the appellant as such defects memos remained undelivered. Therefore, once the memo of appeal was filed within a period of limitation, the non-communication of defect memo will not lead to delay, requiring condonation which may require even any application for condonation. In support of such arguments, learned counsel for the appellant relies upon section 37-C of the Act which reads as under: –
6. 37-C Service of decisions, orders, summons etc: –
(1) Any decision or order passed or any summons or notices issued under this Act or the rules made thereunder, shall be served: –
(a) by tendering the decision, order, summons or notice or sending it by registered post with acknowledgment due, to the person for whom it is intended or his authorized agent, if any;
(b) if the decision, order, summons or notice cannot be served in the manner provided in clause (a), by affixing a copy thereof to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case may be, is intended;
(c) if the decision, order, summons or notice cannot be served in the manner provided in clauses (a) and (b) by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice.
(2) Every decision or order passed or any summons or notice issued under this Act or the rules made thereunder, shall be deemed to have been served on the date on which the decision, order, summons or notice is tendered or delivered by post or a copy thereof is affixed in the manner provided in sub section (1).
7. Reliance is also placed upon a Division Bench judgment of Gujarat High Court reported as, Protection & Security Services v. Union of India 2012 (276) ELT 177 (Guj.) and that of Bombay High Court reported as Amidev Agro Care (P.) Ltd. v. Union of India 36 STT 147.
8. The argument of learned counsel for the appellant is that in terms of section 37C(1)(c) of the Act, the notice is required to be affixed on the notice board of the officer or authority who or which passed such decision and in terms of clause (b) the notice was required to be affixed on the conspicuous part of the factory or warehouse or other place of business or usual place or residence of the person for whom such decision, order, summons or notice, as the case may be, is intended; if the notice issued to the appellant could not be served in terms of clause (a) of section 37C(1) of the Act.
9. We have heard learned counsel for the appellant but find no merit in the present appeal. The appellant has filed memo of appeal disclosing a address. The defect memos were sent under registered A.D. post on the addresses so given. Once, the letter has been sent under registered A.D. post, the same is presumed to be delivered in terms of section 27 of the General Clauses Act 1897. Reference may be made to the judgment of Hon’ble the Supreme Court reported as Harcharan Singh v. Shivrani  2 SCC 535, wherein it has been held that
7. Section 27 of the General Clauses Act, 1897 deals with the topic -“Meaning of service by post” and says that where any Central Act or Regulation authorizes or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting it by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. The section thus raises a presumption of due service or proper service if the document sought to be served is sent by properly addressing, prepaying and posting by registered post to the addressee and such presumption is raised irrespective of whether any acknowledgment due is received from the addressee or not. It is obvious that when the section raises the presumption that the service shall be deemed to have been effected it means the addressee to whom the communication is sent must be taken to have known the contents of the document sought to be served upon him without anything more. Similar presumption is raised under illustration (f) to section 114 of the Indian Evidence Act whereunder it is stated that the court may presume that the common course of business has been followed in a particular case, that is to say, when a letter is sent by post by prepaying and properly addressing it the same has been received by the addressee. Undoubtedly, the presumptions both under section 27 of the General Clauses Act as well as under section 114 of the Evidence Act are rebuttable but in the absence of proof to the contrary the presumption of proper service or effective service on the addressee would arise. In the instant case, additionally, there was positive evidence of the postman to the effect that the registered envelope was actually tendered by him to the appellant on November 10, 1966 but the appellant refused to accept. In other words, there was due service effected upon the appellant by refusal. In such circumstances, we are clearly of the view, that the High Court was right in coming to the conclusion that the appellant must be imputed with the knowledge of the contents of the notice which he refused to accept. It is impossible to accept the contention that when factually there was refusal to accept the notice on the part of the appellant he could not be visited with the knowledge of the contents of the registered notice because, in our view, the presumption raised under section 27 of the General Clauses Act as well as under section 114 of the Indian Evidence Act is one of proper or effective service which must mean service of everything that is contained in the notice.
10. Later in, Sunil Kumar Sambhudayal Gupta (Dr.) v. State of Maharashtra  13 SCC 657, it has been held as under: –
“54. In (1989) 2 SCC 602, Gujarat Electricity Board v. Atmaram Sungomal Poshani, this Court examined the issue regarding the presumption of service of letter sent by registered post under section 27 of the General Clauses Act, 1897 and held as under: (SCC pp. 611-12, para 8)
8. There is presumption of service of a letter sent under registered cover…. No doubt the presumption is rebuttable and it is open to the party concerned to place evidence before the court to rebut the presumption by showing that the address mentioned on the cover was incorrect or that the postal authorities never tendered the registered letter to him…. The burden to rebut the presumption lies on the party, challenging the factum of service.” (Emphasis added)
A similar view has been reiterated by this Court in (1996) 7 SCC 275, CIT v. V.K. Gururaj and (1997) 2 SCC 637, Shimla Development Authority v. Santosh Sharma.
55. In AIR 1918 PC 102, Harihar Banerji v. Ramsashi Roy, a similar view had been taken by the Privy Council, referring to Illustration (f) of Section 114 of the Evidence Act, 1872.
11. Clauses (b) and (c) of sub-section (1) of section 37-C has no applicability to the facts of the present case inasmuch sub-section (1) (a) contemplates that the notices issued under the Act shall be served by tendering the notice by registered post to the person intended or its authorized agent with acknowledgment due. Sub Clause (b) and (c) would be applicable in the event, notice cannot be served in terms of sub-clause (a).
12. The notices of the defect memos were sent by registered post on the addresses mentioned by the appellant in the memo of appeal. Therefore, the notice of defect memo sent to the appellant by registered post is deemed to be served in terms of section 37C(1) (a) of the Act read with section 27 of the General Clauses Act. Once, the appellant has not removed the objections within a reasonable period of the defective memo of appeals, the memorandum of appeal has been rightly rejected being barred by limitation. The appeal is thus beyond the period of limitation.
13. Since, the appellant has taken more than six years to remove the defects in the appeal, we do not find that the order of the Tribunal does not raise any substantial question of law. In fact, the memo of appeal before the Central Excise Commissionerate, Amritsar was also dismissed for the reason that the appellant has failed to comply with the condition of pre-deposit of tax of the duty.
14. In view of the conduct of the appellant during the last 8 years, we do not find any case is made out for any indulgence in law or equity.
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018