Case Law Details
Sunbright Cement Agencies Pvt Ltd. Vs. Commissioner (Appeals) (CESTAT Mumbai)
What is important to note is that even the initial period of three months provided for in sub-section (3) of section 85 of the Finance Act for presenting an appeal begins to run from the date of receipt of the order. The order was received by the appellant only on July 05, 2021. The Commissioner (Appeals) has drawn a presumption that the order was served upon the appellant in 2009 itself, because of the communication dated February 10, 2009 of the Superintendent (Adjudication) requesting the Assistant Commissioner to deliver the order upon the Appellant. There was nothing on the record before the Commissioner (Appeals) to come to a definite conclusion that the order was served upon the Appellant in 2009. The order also does not mention that the Assistant Commissioner of the Superintendent (Adjudication) had any acknowledgment about receipt of the order by the appellant. A statutory right of presenting an appeal within a specified time can be defeated only by cogent evidence about service of the order and such a right cannot be defeated by drawing a presumption about service of order. The Commissioner (Appeals), therefore, committed an error as a result of which the appellant has been deprived of his right to prosecute the appeal filed before the Commissioner (Appeals).
The order dated November 26, 2015 passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside. The appeal shall now be heard on merits. As this is an old matter, it is expected that the Commissioner (Appeals) shall make an endeavor to decide the appeal at an early date and preferably within the period of four months from the date a certified copy of the order is produced by either of the party before the Commissioner (Appeals). The appeal is, accordingly, allowed.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal has been filed to assail the order dated November 26, 2015 passed by the Commissioner (Appeals), Service Tax-II, Mumbai1, by which the appeal filed before the Commissioner (Appeals) on August 05, 2011 under section 85(1) of the Finance Act 19942 to assail the order dated January 23, 2009 passed by the Additional Commissioner has been dismissed for the reason that it was filed beyond the period of limitation stipulated in sub-section (3) of section 85 of the Finance Act.
2. It will be useful to reproduce paragraph 9 of the order of the Commissioner (Appeals) and it is as follows:
“The authorised Advocate, on behalf of the appellant, vide letter dated 3.11.2015 has submitted copies of letters dated 10.2.2009 of the Supdt. STax (Adj) addressed to AC, STax Dn. IV intimating about the return of the undelivered order by the postal authorities as unclaimed, and their letter dated 4.7.2017 requesting for a certified copy of the adjudication order, to support their contention. However, it is observed from para 2 of the letter dated 10.2.2009 of Supdt.(Adj) addressed to AC, Service Tax, Dn.IV, that he has also made a request to deliver the impugned OIO upon MTPL, which must have been complied with and order served upon MTPL accordingly in 2009 itself. Hence, the plea of the appellant that the order was served upon them only on 04.07.2011 is not acceptable.”
(emphasis supplied)
3. This letter dated February 10, 2009 referred to in the aforesaid order of the Commissioner (Appeals) is reproduced below:
“ The order-in-original mentioned in the subject matter was sent to the Noticees by Speed post A.D on the address available on records. However, the same has been returned undelivered by the postal authorities with a remark “unclaimed”
It is requested to kindly arrange to deliver the said O-I-O (copy enclosed) to the Noticees and the acknowledgment obtained may please be forwarded to this office for records.”
4. Shri Vipin Jain, learned counsel appearing for the appellant submitted that the appeal was filed before the Commissioner (Appeals) on August 05, 2011 after the appellant received a copy of the order dated January 23, 2009 passed by the Additional Commissioner on July 05, 2011. The submission is that the period for filing the appeal would commence from the date the order was received and the Commissioner (Appeals) committed an error in drawing an inference from the communication dated February 10, 2009 sent by the Superintendent (Adjudication) to the Assistant Commissioner of the Service Tax that the order must have been served upon the appellant in 2009 itself merely because there was a direction to serve a copy of the order upon the appellant. Learned counsel submitted that there is no evidence on the record which may even remotely indicate that the order was actually served upon the appellant prior to July 05, 2011.
5. Shri S.K. Hatangadi, learned Authorized Representative appearing for the Department has supported the impugned order and has placed reliance upon a decision of the Supreme Court in Singh Enterprises vs. CCE, Jamshedpur3. Learned Authorized Representative has also submitted that once the amalgamation proceedings of the two companies was ordered on January 11, 2008 and the matter was still pending before the Additional Commissioner at that point of time, the appellant should have appeared before the Additional Commissioner to pursue the matter, but it did not.
6. The submissions advanced by the learned Counsel for the appellant and the learned Authorized Representative appearing for the Department have been considered.
7. To appreciate the submissions it would be necessary to reproduce section 85 of the Finance Act and it is as follows:
“Section 85. Appeals to the Commissioner of Central Excise (Appeals):
(1) Any person aggrieved by any decision or order passed by an adjudicating authority subordinate to the Commissioner of Central Excise may appeal to the Commissioner of Central Excise (Appeals).
(2) Every appeal shall be in the prescribed form and shall be verified in the prescribed manner.
(3) An appeal shall be presented within three months from the date of receipt of the decision or order of such adjudicating authority, relating to service tax, interest or penalty under this Chapter:
PROVIDED that the Commissioner of Central Excise (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within a further period of three months.
(4) xxxxx xxxxx xxxxx.
(5) xxxxx xxxxx xxxxx”
8. The case of the appellant is that it is only when the recovery cell of the Department informed the appellant about the demand of service tax with penalty and interest pursuant to the order passed by the Additional Commissioner, that the appellant for the first time acquired knowledge of the order and the appellant immediately thereafter sent a letter dated May 14, 2011 to the Adjudication Cell of the Department for providing an attested copy of the order to the appellant to enable it to either pay the dues or take such appropriate action as may be considered necessary. This letter was followed by a letter dated July 04, 2011 addressed to the Superintendent of the Service Tax. This letter mentions that one Shri Durgaprasad Dubey was being authorized to receive the order. On record is also a communication dated July 05, 2011 sent by the appellant to the Superintendent of the Service Tax acknowledging the receipt of the order dated January 23, 2009 on July 05, 2011, on the basis of the request made in the letter dated July 04, 2011.
9. As the Commissioner (Appeals) has relied on the communication dated February 10, 2009 sent by the Superintendent (Adjudication) to the Assistant Commissioner, it is necessary to examine it. This letter specifically mentions that the order-in-original was sent to the appellant by speed post with acknowledgment due on the address available on the record, but the same had returned by the postal authorities undelivered with the remark “unclaimed”. The Superintendent also made a request to the Assistant Commissioner to arrange delivery of the original order upon the appellant and a copy of the order was also enclosed. The Assistant Commissioner was also requested to obtain an acknowledgment from the appellant about the receipt of the letter and then forward it to the Superintendent for keeping it on the record.
10. The Commissioner (Appeals), in paragraph 9 of the order has drawn a presumption from the aforesaid letter dated February 10, 2009 that since a request had been made to serve a copy of the letter upon the appellant, it must have been complied with and the order must have been served upon the appellant in 2009 itself. The Commissioner (Appeals), in view of the provisions of the section 85(3) of the Finance Act, therefore, dismissed the appeal since the appeal was not filed even within the further period of three months after the expiry of the initial period of three months and the Commissioner (Appeals) had no power to condone the delay in filing the appeal after the expiry of the further period of three months.
11. It is for this reason that the learned Counsel appearing for the appellant submitted that only a presumption has been drawn by the Commissioner (Appeals) that the order was served upon the appellant in 2009 itself.
12. Learned Authorized Representative of the Department has, however, placed reliance on the judgment of the Supreme Court in Singh Enterprises.
13. The Supreme Court in Singh Enteprises examined the provisions of section 35 of the Central Excise Act, 1944, which are pari materia to the provisions of section 85 of the Finance Act, and observed that the delay can be condoned in accordance with the language of the Statute which confers power on the Appellate Authority to entertain the appeal by condoning the delay only upto 30 days after expiry of 60 days, which is the normal period for preferring the appeal. It is for this reason that the Supreme Court observed that the Commissioner and the High Court were justified in holding that there was no power to condone the delay after the expiry of the further period of 30 days. Paragraphs 8, 9 and 10 of the judgment are reproduced below:
“8. The Commissioner of Central Excise (Appeals) as also 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. It was submitted that the logic of Section 5 of the Indian Limitation Act, 1963 (in short the „Limitation Act‟) can be availed for condonation of delay. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within three months from the date of communication to him of the decision or order. However, if the Commissioner is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of 60 days, he can allow it to be presented within a further period of 30 days. In other words, this clearly shows that the appeal has to be filed within 60 days but in terms of the proviso further 30 days time can be granted by the appellate authority to entertain the appeal. The proviso to sub-section (1) of Section 35 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 and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period.”
(emphasis supplied)
14. Section 35 of the Central Excise Act 1944 which was considered by the Supreme Court in Singh Enterprises, is reproduced below:
“35. Appeals to Commissioner (Appeals). – (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Commissioner of Central Excise, may appeal to the Commissioner of Central Excise (Appeals) [hereafter in this Chapter referred to as the Commissioner (Appeals)] within sixty days from the date of the communication to him of such decision or order:
Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.
(2) Every appeal under this section shall be in the prescribed form and shall be verified in the prescribed manner.”
12. What is important to note is that even the initial period of three months provided for in sub-section (3) of section 85 of the Finance Act for presenting an appeal begins to run from the date of receipt of the order. The order was received by the appellant only on July 05, 2021. The Commissioner (Appeals) has drawn a presumption that the order was served upon the appellant in 2009 itself, because of the communication dated February 10, 2009 of the Superintendent (Adjudication) requesting the Assistant Commissioner to deliver the order upon the Appellant. There was nothing on the record before the Commissioner (Appeals) to come to a definite conclusion that the order was served upon the Appellant in 2009. The order also does not mention that the Assistant Commissioner of the Superintendent (Adjudication) had any acknowledgment about receipt of the order by the appellant. A statutory right of presenting an appeal within a specified time can be defeated only by cogent evidence about service of the order and such a right cannot be defeated by drawing a presumption about service of order. The Commissioner (Appeals), therefore, committed an error as a result of which the appellant has been deprived of his right to prosecute the appeal filed before the Commissioner (Appeals).
16. Reliance by the learned Authorized Representative appearing for the Department on the decision of the Supreme Court in Singh Enterprises is misplaced. It is no doubt true that the Supreme Court held that an appeal has to be filed within the period prescribed in the Act and the provisions of section 5 of the Limitation Act cannot be availed of, but the period of three months has to commence from the date a copy of the order is actually served upon the appellant and in the instant case the order was actually served upon the appellant only on July 05, 2011.
17. Such being the position, the appeal presented by the appellant on August 05, 2011 was within the initial period of three months prescribed in sub-section (3) of the section 85 of the Finance Act.
18. Learned Authorized Representative of the Department also submitted that the appellant should have pursued the matter before the Additional Commissioner since the amalgamation order was passed on January 11, 2008 when the proceedings were still pending before the Additional Commissioner.
19. This fact has no bearing on the issue involved in this appeal since all that is required to be examined is whether the appeal was filed within the time stipulated in section 85(3) of the Finance Act.
20. The order dated November 26, 2015 passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside. The appeal shall now be heard on merits. As this is an old matter, it is expected that the Commissioner (Appeals) shall make an endeavor to decide the appeal at an early date and preferably within the period of four months from the date a certified copy of the order is produced by either of the party before the Commissioner (Appeals). The appeal is, accordingly, allowed.
