CESTAT, BANGALORE BENCH
Bhagyalaxmi Electroplast (P.) Ltd.
Commissioner of Customs & Central Excise, Hyderabad
STAY ORDER NO. 52 OF 2012
ST/STAY/226 OF 2011
ST/397 OF 2011
JANUARY 11, 2012
P.G. Chacko, Judicial Member
This application seeks waiver of pre-deposit and stay of recovery in respect of Service Tax of Rs. 2,05,494/- and penalties. The tax demand is for the period 2004-2005 to 2008-09. The demand is on the freight amount mentioned in the invoices under which the inputs were supplied to the appellant by M/s. Reliance Industries Ltd. (RIL) during the above period. The demand is based on Rule 2(1)(d)(v) of the Service Tax Rules, 1994. The lower authorities have held that the appellant was liable to pay Service Tax on GTA Service which was used for supply of their inputs by M/s. RIL. The case of the appellant is that they did not pay the freight. The freight was paid by the input supplier and therefore they have no liability to pay Service Tax on the GTA Service based on the above rule. The learned counsel for the appellant has claimed prima facie on this basis.
2. The learned Additional Commissioner (AR) points out that the learned Commissioner (Appeals) rejected the assessee’s appeal not only on merits but also on the ground of limitation. It is submitted that no application for condonation of the delay of two days involved in the filing of the assessee’s appeal against the order of the original authority was filed with the Commissioner (Appeals) and consequently, the appeal was inter alia held to be time barred. Before examining the merits of the case, we have, at the outset, to record a finding on the preliminary objection raised by the learned Additional Commissioner (AR). On a perusal of the records, we note that the appellant claimed before the Commissioner (Appeals) that they had received the order-in-original on 9.1.2010. With reference to this date, the appeal before the Commissioner (Appeals) was within the statutory period. The learned Commissioner (Appeals) in the impugned order noted that the order-in-original had been delivered to the party on 5.1.2010. With reference to this date, a delay of two days was found and accordingly the appeal of the party was held to be time-barred. Nevertheless, the learned Commissioner (Appeals) chose to consider the appellant’s case on merits also. We do not want to make any further comments on this course of action. Suffice it to say that the appellate authority could not have considered the appeal on merits where the appeal was filed beyond the statutory period. Having considered the appeal on merits, the appellate authority should appropriately be considered to have entertained the appeal by virtually condoning any delay. It is also significant to note that it was within the powers of the Commissioner (Appeals) to condone the delay of two days which was within the condonable period of delay prescribed in the statute.
3. Reverting to the substantial dispute in this case, we have found that the entire demand on the freight element is based on Rule 2(1)(d)(v) of the Service Tax Rules, 1994. Sub-clause (v) was inserted in Rule 2(1)(d) only on 3.12.2004 and the same cast Service Tax liability on the person paying the freight. Prima facie, the appellant did not pay the freight and therefore there is no tax liability on their part. In this view of the matter, we grant waiver of pre-deposit and stay or recovery in respect of adjudged dues.