2025 (5) TMI 1825 - AT - Service Tax

Application for Condonation of Delay - No details with regards to the date of receipt and reason for delay in receipt - computation of limitation period under Section 85(3A) - HELD THAT - The Hon ble Bombay High Court in the case of Skoda Auto Volkswagen India Pvt. Ltd. V/s Commissioner (Appeals) 2021 (3) TMI 542 - BOMBAY HIGH COURT wherein in similar facts of the case similar order of the Commissioner (Appeals) has been set aside and matter is remanded back. In view of the above decisions I do not find any merits in the manner in which the appeal filed by the Appellant has been dismissed. In my view in term of the decision of the Hon ble Bombay High Court the appeal should be treated as filed within the extended period of limitation and consequences should follow. The Application for Condonation of Delay should have been considered treating the appeal to be filed within the extended period of limitation. The Appeal is allowed by way of remand to the First Appellate Authority for consideration of the Condonation of Delay Application filed by the Appellant and if the Application is allowed the issue may be decided on merits. As the matter is substantially old the matter in remand proceeding should be finalized by Commissioner (Appeal) within three months of receipt of this order.

Summary

Issues Presented and Considered

The core legal questions considered by the Tribunal in this appeal are:

• Whether the appeal filed by the appellant was time-barred under Section 85(3A) of the Finance Act, 1994, given the prescribed limitation period of two months from the date of receipt of the order, extendable by one month on sufficient cause.
• Whether the delay in filing the appeal could be condoned beyond the one-month extension period allowed under the proviso to Section 85(3A).
• Whether the date of receipt of the appeal by the Commissioner (Appeals) or the date of dispatch by the appellant (via courier/speed post) should be considered for computing limitation.
• The legal effect of dispatch of appeal within limitation but receipt beyond limitation due to postal or courier delay.
• The proper interpretation and application of the terms "month" and "from" in the computation of limitation period under Section 85(3A), including the applicability of the General Clauses Act, 1897.
• Whether the appellate authority has jurisdiction to condone delay beyond the statutory maximum period.
• The relevance and applicability of judicial precedents, including Supreme Court and High Court decisions, in interpreting limitation and condonation provisions under the Finance Act and Central Excise Act.

Issue-wise Detailed Analysis

1. Limitation Period for Filing Appeal under Section 85(3A) of the Finance Act, 1994

The statutory framework under Section 85(3A) provides that an appeal must be presented within two months from the date of receipt of the decision or order of the adjudicating authority. The proviso permits the Commissioner (Appeals) to condone delay for a further period of one month if sufficient cause is shown. The Tribunal noted that the appeal was received by the Commissioner (Appeals) beyond this three-month combined period, thus prima facie rendering it time-barred.

Precedent from the Supreme Court in Singh Enterprises was cited, which clarified that the appellate authority has no jurisdiction to condone delay beyond the maximum prescribed period (two months plus one month). The Court emphasized that Section 5 of the Limitation Act, 1963 is excluded in such statutory provisions, and the limitation period is strictly binding.

The Tribunal initially observed that the Commissioner (Appeals) rightly dismissed the appeal as time-barred since the appeal was filed after the extended period.

2. Date of Filing vs. Date of Dispatch of Appeal

The appellant contended that the appeal was dispatched within the limitation period via courier, with delivery attempts made before expiry of the extended period. The appeal was only physically received and recorded by the Commissioner (Appeals) after the limitation period, due to failure of office staff to receive the courier on earlier dates. The appellant argued that the appeal should be deemed filed on the date of dispatch or delivery attempt, not the date of official receipt.

The Tribunal examined the tracking records confirming the appeal was sent on 22/10/2022 and delivery attempts were made on multiple dates before successful delivery on 01/11/2022, which was within the extended limitation period. The Tribunal held that if the appeal was dispatched within the prescribed time and was out for delivery before expiry of limitation, the appellant could not be faulted for delay caused by the office's failure to receive it.

Relevant case law from the Bombay High Court was discussed, which held that an appeal dispatched within limitation but received after limitation due to postal delay is not barred by limitation. The Tribunal also cited decisions from the Allahabad and Kerala High Courts affirming that dispatch within limitation is sufficient for compliance.

3. Interpretation of "Month" and Computation of Limitation Period

The Tribunal analyzed the meaning of "month" under Section 3(35) of the General Clauses Act, 1897, which defines a month as a calendar month according to the British (Gregorian) calendar, not a fixed number of days. This interpretation affects the calculation of limitation periods, as months can vary between 28 to 31 days.

The Tribunal also applied Section 9 of the General Clauses Act, which mandates excluding the first day when the word "from" is used in reckoning time periods. Thus, the limitation period commences the day after receipt of the order.

Applying these principles, the Tribunal calculated that the two-month period commenced the day after receipt and ended on the corresponding date two months later, with the one-month extension adding a further calendar month. The extended period in the appellant's case ended on 01/11/2022, considering that the last day of limitation falling on a Sunday (a holiday) is extended to the next working day per Section 10 of the General Clauses Act.

4. Jurisdiction of Appellate Authority to Condone Delay Beyond Statutory Period

The Tribunal reiterated the settled legal position that the appellate authority's power to condone delay is limited to the maximum period prescribed by statute (one month beyond two months). Any delay beyond this is not condonable by the Commissioner (Appeals). This principle was supported by the Supreme Court's ruling in Singh Enterprises and other precedent.

However, the Tribunal observed that the Commissioner (Appeals) erred in rejecting the appeal outright without considering the appellant's contention and evidence that the appeal was dispatched within the extended period and that the delay was due to courier delivery issues beyond the appellant's control.

5. Effect of Dispatch via Post or Courier and Postal Delay

The Tribunal recognized that dispatch of appeal by post or courier is a valid mode of presentation under the statute and rules. It relied on the Allahabad High Court's Full Bench decision in Bhikha Lal v. Munna Lal, which held that the postal department acts as an agent of the sender, and dispatch within limitation should be deemed compliance even if the appeal is received late due to postal delay.

The Tribunal emphasized that procedural rules should facilitate justice and not obstruct it. It noted that the appellant had taken reasonable steps to dispatch the appeal timely, and the delay in receipt was due to circumstances beyond their control.

6. Treatment of Competing Arguments and Application of Law to Facts

The Revenue argued that the appeal was received after the extended period and thus was barred by limitation. The appellant countered with courier tracking evidence demonstrating timely dispatch and delivery attempts within the extended period.

The Tribunal found merit in the appellant's argument, holding that the appeal should be treated as filed within the extended limitation period. It criticized the Commissioner (Appeals) for failing to consider the appellant's explanation and evidence regarding the delay in receipt.

The Tribunal applied the legal principles on limitation computation, the effect of dispatch, and the exclusion of the Limitation Act's Section 5 to conclude that the appeal was not barred by limitation.

Significant Holdings

"The appeal was dispatched within the extended period of limitation and was out for delivery prior to expiry of the extended period of limitation; therefore, the appellant cannot be faulted for delay caused by failure of the office to receive the appeal. The appeal should not be held barred by limitation."

"The appellate authority has no power to condone delay beyond the maximum period prescribed by statute, i.e., one month beyond two months under Section 85(3A) of the Finance Act, 1994. However, the authority must consider the date of dispatch and not merely the date of receipt in computing limitation."

"The word 'month' in limitation provisions must be construed as a calendar month according to the British calendar and the first day is excluded in computation of limitation when the word 'from' is used, as per Section 3(35) and Section 9 of the General Clauses Act, 1897."

"Dispatch of appeal by post or courier within limitation is a valid mode of presentation, and delay in receipt due to postal or courier service is attributable to the sender's agent and should not result in dismissal of appeal as time-barred."

"Procedural rules and limitation provisions are intended to facilitate justice and should not be applied rigidly to defeat bona fide appeals where delay is caused by circumstances beyond the appellant's control."

"The appeal is allowed by way of remand to the First Appellate Authority to consider the application for condonation of delay on merits and decide the appeal accordingly within three months."