Case Law Details
CA Urvashi Porwal
Brief of the Case
In the case of M/s. Hindustan Institute of Aeronautics Vs.C.C.E.&S.T., Bhopal, it was held that the service of order/notice through speed post without acknowledgment is not in accordance with law.
Facts of the Case
The Stay applications along with appeals is filed against Orders-in-Appeal dated 27.11.2013, which rejected the appellant’s appeal against the primary adjudication order on the ground that the appeal was filed after the prescribed period and therefore was barred by time.
Contentions of the assessee
The appellant has contended that the primary adjudication order claimed have to be sent by speed post was not received by it and when it received copy thereof, it filed the appeal within the prescribed period. It also contended that service by speed post is not in accordance with provisions of Section 37C of Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 and therefore, the Commissioner (Appeals) was not justified in rejecting the appeal as time barred. It cited the following judgments in support of its contentions:-
(i) Premier Garment Processing Vs. CESTAT, Chennai [2015 (39) STR 812 (Mad.)].
(ii) New Drug & Chemical Co. Vs. Union of India [2015 (325) ELT 313 (Bom.)]
(iii) M/s. Venkatapathi Financial Services. Vs. The Supdt. of Central Excise and 4 others [2015-TIOL-1584-HC-AP-ST]
(iv) OSA Shipping Pvt. Ltd. Vs. CCE, Chennai [2015 (325) ELT 486 (Mad.)]
Contentions of the Revenue
The Revenue contended that there was presumed service when order was sent by Registered Post with Acknowledgement Due (RPAD) as per Section 37C(1)(a) ibid. Revenue also argued that amendment to Section 37C ibid to include speed post with proof of delivery as a mode of service with effect from 10.05.2013 was clarificatory in nature and therefore had retrospective applicability. The Revenue however agreed that Revenue did not have the evidence of delivery of the impugned order although Revenue has the evidence of having despatched it by speed post. Revenue cited the following judgments in its support:-
(i) Jay Balaji Jyoti Steels Ltd. Vs. CESTAT, Kolkatta [2015 (37) STR 673 (Ori.)]
(ii) Mirzapur Electrical Industries Ltd. Vs. CCE, Allahabad [ 2014 (300) ELT 496 (All.)]
The Revenue also stated that the order of Orissa High Court in the case of Jay Balaji Jyoti Steels Ltd. Vs. CESTAT, Kolkatta (supra) has been affirmed by the Supreme Court as reported at 2015 (40) STR J133 (SC).
Held by Hon’ble CESTAT
The Hon’ble CESTAT stated that as per the said Section, the primary adjudication order was required to be sent by RPAD. Bombay High Court in the case of Amidev Agro Care Pvt. Ltd. Vs. Union of India [2012 (26) STR 229 (Bomb)], Punjab & Haryana High Court in the case of CCE, Ludhiana Vs. Best Dyeing [2012 (27) STR 97 (P&H)] and Madras High Court in the case of Premier Garments Processing Vs. CESTAT, Chennai (supra) have unequivocally held that communication by speed post was not covered as a mode of service under Section 37C of Central Excise Act, 1944 prior to 10.05.2013. Regarding the contention of presumed service of order when it was sent by speed post, the Hon’ble CESTAT stated that Madras High Court in the case of OSA Shipping Pvt. Ltd. Vs. CCE, Chennai (supra) condoned delay in filing appeal even when the primary adjudicating order was sent by RPAD by observing that Revenue did not produce the acknowledgement card and the appellant did not stand to gain anything by delaying the filing of appeal.
Regarding Revenue’s contention that speed post is also registered post and the amendment to Section 35C(1)(a) has retrospective application being clarificatory in nature, it is noticed that Allahabad High Court in the case of Mirzapur Electrical Industries Ltd. Vs. CCE, Allahabad (supra) has indeed held that registered post and speed post are same method of service and Orissa High Court in the case of Jay Balaji Jyoti Steels Ltd. Vs. CESTAT, Kolkatta (supra) also held that speed post is also to be treated as registered post and that amendment to Section 35C(1)(a) ibid to include speed post was clarificatory in nature and would date back when the original provision was introduced.
While both these judgments do state that speed post is to be treated as registered post, they clearly fall short of stating that a speed post is to be treated as RPAD. As during the relevant period, the primary adjudicating order was required to be sent by RPAD, sending it by speed post would not fulfil the requirement of the said section. The amended provision of Section 37C(1)(a) ibid effective from 10.05.2013 allows sending of the orders by “speed post with proof of delivery”. It is admitted by Revenue that in this case, it has no proof of delivery of the primary adjudication order. Thus in fact, even with the support of the judgements Allahabad High Court in the case of Mirzapur Electrical Industries Ltd. Vs. CCE, Allahabad (supra) and Orissa High Court in the case of Jay Balaji Jyoti Steels Ltd. Vs. CESTAT, Kolkatta (supra), Revenue falls short of fulfilling the requirement of Section 37C(1)(a) ibid. Regarding Revenue’s contention that the Orissa High Court judgment in the case of Jai Balaji Jyoti Steel Ltd. Vs. CESTAT, Kolkatta (supra) has been upheld by the Supreme Court and therefore has over-riding effect over other High Court judgements, it is noticed that Supreme Court summarily dismissed SLP against that order and therefore as clarified by the Supreme Court in the case of Kunhaymmed Vs. State of Kerala [2001 (129) ELT 11 (SC)], there is no merger of the Orissa High Court judgment with the orders of the Supreme Court and therefore the said Orissa High Court judgment continues to have the vitality of a High Court order and does not obtain the vitality of a Supreme Court order.
It is not in dispute that the appeal was filed within the stipulated period after the appellant obtained copy of the primary adjudication order.
In the light of the foregoing analysis, the requirement of pre-deposit has been waived and the appeal was allowed by way of remand to the Commissioner (Appeals) with the direction to take up the appeal along with stay application and decide the same on merit.
