2025 (6) TMI 1735 - 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 by the Tribunal is whether the delay in filing the appeal before the Commissioner (Appeals) can be condoned beyond the statutory period prescribed under Section 85(3A) of the Finance Act, 1994, as amended by the Finance Bill, 2012. Specifically, the Tribunal examined:

• Whether the Commissioner (Appeals) has jurisdiction to condone delay in filing the appeal beyond the prescribed period of two months plus an additional one month on sufficient cause.
• The applicability and scope of the proviso to Section 85(3A) regarding condonation of delay.
• The relevance and applicability of the Limitation Act, 1963, particularly Section 5 thereof, in condoning delay beyond the statutory period.
• The sufficiency and acceptability of the cause shown by the appellant for the delay in filing the appeal.

2. ISSUE-WISE DETAILED ANALYSIS

Issue: Jurisdiction to condone delay beyond prescribed period under Section 85(3A) of the Finance Act, 1994

Relevant legal framework and precedents: Section 85(3A) of the Finance Act, 1994, as amended by the Finance Bill, 2012, prescribes that an appeal against an order relating to service tax, interest, or penalty must be presented within two months from the date of receipt of the order. The proviso to this section grants the Commissioner (Appeals) discretionary power to condone delay up to a further period of one month if sufficient cause is shown.

The Tribunal relied heavily on the Supreme Court's decision in M/s Singh Enterprises, which interpreted a similar provision under Section 35 of the Central Excise Act, 1944. This precedent clarified that the appellate authority's power to condone delay is strictly limited to the statutory period prescribed (sixty days) plus an additional thirty days, and no further extension beyond this is permissible.

Court's interpretation and reasoning: The Tribunal noted that the appeal in the present case was filed after more than one year from the date of receipt of the original order, which far exceeds the total permissible period of three months (two months plus one month). The Commissioner (Appeals) rightly dismissed the appeal on the ground of limitation. The Tribunal affirmed this decision, holding that the Commissioner (Appeals) does not have jurisdiction to condone delay beyond the one-month extension period provided under the proviso to Section 85(3A).

Key evidence and findings: The factual record showed that the appeal was filed well beyond the prescribed limitation period. The appellant's explanation for the delay was that the business was practically closed and reopened briefly, and that the order was handed over to a consultant immediately upon receipt. The Tribunal found these reasons insufficient to justify the prolonged delay.

Application of law to facts: Applying the legal framework and the Supreme Court's authoritative interpretation, the Tribunal concluded that the appeal was barred by limitation and that the Commissioner (Appeals) correctly exercised the statutory limitation on condonation of delay.

Treatment of competing arguments: The appellant's contention that the Limitation Act, 1963 (Section 5) could be invoked to condone delay was rejected. The Tribunal emphasized the express statutory exclusion of the Limitation Act by the specific provisions under the Finance Act. The appellant's reliance on other decisions allowing condonation of delay in exceptional circumstances was distinguished on the basis that those cases did not override explicit statutory limitation periods.

Conclusions: The Tribunal held that the statutory scheme clearly restricts condonation of delay to one month beyond the initial two-month period and excludes the application of the Limitation Act. Therefore, the appeal filed after more than a year was rightly dismissed for being time-barred.

3. SIGNIFICANT HOLDINGS

The Tribunal preserved the crucial legal reasoning from the Supreme Court's decision in M/s Singh Enterprises, stating verbatim:

"...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."

Core principles established include:

• The limitation period prescribed under the statute is mandatory and cannot be extended beyond the specific period granted by the legislature.
• The power of the Commissioner (Appeals) to condone delay is circumscribed and cannot be exercised beyond the statutory maximum period.
• The Limitation Act, 1963, does not apply where a special statute explicitly prescribes limitation periods and excludes its application.
• Sufficient cause for delay must be compelling and cannot be based on mere business closure or procedural lapses.

Final determinations on the issue:

• The appeal filed beyond the prescribed limitation period of two months plus one month was rightly dismissed by the Commissioner (Appeals).
• The Tribunal upheld the dismissal, finding no merit in the appeal or the appellant's explanation for delay.
• The statutory limitation provisions under Section 85(3A) are strictly enforced, and condonation of delay beyond the prescribed period is impermissible.