2025 (6) TMI 1730 - AT - Service Tax

Time limitation - Condonation of delay in filing the appeal by the Commissioner (Appeal) - sufficient cause for delay or not - HELD THAT - In the present case the appeal has been filed as observed by the Commissioner (Appeal) after more than expiry of period of 90 days after the receipt of the order of original authority - In terms of Section 85 (3A) of the Finance Act 1994 it is observed that the appeal was to be filed before the Commissioner (Appeal) within two months of the date of the receipt of the order in original by the appellant. As per the proviso Commissioner (Appeal) has been granted the power to condone delay of one month in filing the appeal on sufficient cause being shown. In the present case appeal was filed before the Commissioner (Appeal) after more than a year from the date of receipt of order in original. Hence Commissioner (Appeal) has rightly held that appeal was filed beyond the prescribed period of limitation and has dismissed the same on this ground alone. This issue is squarely covered by the decision of Hon ble Supreme Court in the case of M/s Singh Enterprises 2007 (12) TMI 11 - SUPREME COURT wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him. There are no merits in this appeal filed by the appellant - appeal dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal question considered in this appeal is whether the Commissioner (Appeals) had the jurisdiction to condone the delay in filing the appeal beyond the prescribed statutory period under the relevant provisions of the Finance Act, 1994, specifically Section 85(3A), and the extent of such condonation power. The issue also involves the interpretation of the limitation period for filing appeals and whether the principles of the Indian Limitation Act, 1963, particularly Section 5 relating to condonation of delay, can be applied to extend the statutory period prescribed for filing appeals before the Commissioner (Appeals).

2. ISSUE-WISE DETAILED ANALYSIS

Issue: Jurisdiction of Commissioner (Appeals) to condone delay beyond prescribed statutory period in filing appeal

Relevant legal framework and precedents: The appeal filing limitation is governed by Section 85(3A) of the Finance Act, 1994, which mandates that an appeal shall be presented within two months from the date of receipt of the decision or order of the adjudicating authority. The proviso to this section empowers the Commissioner (Appeals) to allow a further period of one month for filing the appeal if sufficient cause is shown for the delay.

The matter is squarely governed by the precedent set by the Hon'ble Supreme Court in a case interpreting the analogous provisions under Section 35 of the Central Excise Act, which similarly provided for a limitation of sixty days with an additional thirty days for condonation of delay. The Supreme Court held that the appellate authority's power to condone delay is strictly limited to the statutory period of thirty days beyond the original sixty days, and no further extension is permissible. The Court emphasized that the legislature's explicit provision excludes the application of Section 5 of the Indian Limitation Act, 1963, which generally allows condonation of delay for sufficient cause beyond prescribed limitation periods.

Court's interpretation and reasoning: The Tribunal interpreted Section 85(3A) in light of the Supreme Court's authoritative ruling, concluding that the Commissioner (Appeals) has no jurisdiction to condone delay beyond the additional one-month period prescribed by the proviso. The Tribunal noted that the appeal in the present case was filed after more than one year from the receipt of the original order, which is well beyond the two-month period plus the one-month condonation period allowed under the statute.

The Tribunal further reasoned that allowing condonation beyond the statutory limit would render the specific limitation provisions meaningless and undermine the legislative intent. The Tribunal relied on the Supreme Court's observation that the expression "sufficient cause" must be interpreted in the context of the statute and cannot be used to override explicit limitation periods.

Key evidence and findings: The appellant had filed the appeal after a delay exceeding one year, which was not justified by any sufficient cause. The appellant's explanation that the business was practically closed and delay was due to inexperience was found inadequate, especially since the appellant admitted that the order was immediately handed over to a consultant for filing the appeal.

Application of law to facts: Applying the statutory provisions and the binding Supreme Court precedent, the Tribunal found that the Commissioner (Appeals) correctly dismissed the appeal on the ground of limitation. The appellant's delay was far beyond the permissible period, and the statutory framework does not permit condonation beyond the prescribed one-month extension.

Treatment of competing arguments: The appellant's reliance on general principles of the Limitation Act and certain decisions where courts condoned delay was rejected. The Tribunal clarified that the Limitation Act's Section 5 does not apply to appeals under the Finance Act where a specific limitation period and condonation provision exist. The Tribunal distinguished the appellant's case from other precedents where condonation was allowed on peculiar facts or where no statutory limitation was prescribed.

Conclusions: The Tribunal concluded that the appeal was barred by limitation and the Commissioner (Appeals) had no jurisdiction to condone the delay beyond the one-month period. Therefore, the dismissal of the appeal on limitation grounds was upheld.

3. SIGNIFICANT HOLDINGS

"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."

"Sufficient cause is an expression which is found in various statutes. It essentially means as adequate or enough. There cannot be any straitjacket formula for accepting or rejecting the explanation furnished for delay caused in taking steps. However, the causes shown for condonation have no acceptable value."

Core principles established include:

• The limitation period prescribed under the statute for filing appeals is mandatory and cannot be extended beyond the prescribed period plus the statutory condonation period.
• The power of the Commissioner (Appeals) to condone delay is strictly confined to the statutory proviso and does not allow application of the general Limitation Act provisions.
• "Sufficient cause" must be interpreted in the context of the statute and cannot override explicit statutory limitation periods.
• Delay beyond the statutory condonation period, especially when unexplained or inadequately explained, warrants dismissal of the appeal.

Final determination: The appeal filed after more than one year of delay was rightly dismissed by the Commissioner (Appeals) on limitation grounds, and the Tribunal upheld this dismissal, dismissing the present appeal for lack of merit.