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2025 (7) TMI 346 - AT - Service TaxTime limitation - dismissal of appeal on the ground that the Appeal filed was barred by limitation - service of notice - HELD THAT - In the present case the Order was not dispatched by registered post and there should be proof of delivery also. What is only being stated by the First Appellate Authority in the observation is that the post which was sent to the Appellant containing Order-In-Original did not return to the office. In M/s PREMIER GARMENT PROCESSING VERSUS CESTAT CHENNAI 2015 (10) TMI 1112 - MADRAS HIGH COURT Division Bench of this Court held that It is trite law that limitation has to be reckoned only from the date when the actual service has been effected subject to fulfilling the mandatory requirement of showing proof of delivery. Hon ble High Court of Bombay in the case AMIDEV AGRO CARE PVT LTD VERSUS UNION OF INDIA AND OTHERS 2012 (6) TMI 304 - BOMBAY HIGH COURT held that order has to be served on the assessee or his agent by Registered Post A.D. or any other mode specified in Section 37C and mere proof of dispatch of order is not sufficient compliance of the said section. In the present case the date of receipt of order is 26.08.2022. Commissioner (Appeals) has recorded that copy of the order was provided to the Appellant vide letter dated 26.08.2022. Though it is simultaneously mentioned that the said Order-in-Original was provided to the Appellant earlier also being dispatched through Post on 29.04.2022 itself. However in light of entire above discussion it stands clear that the requirement of the service of any process depends upon the proof of proper receipt of the same by the recipient. The said evidence is admittedly missing on record. Hence the date of receipt of order as mentioned in Section 85 of Finance Act 1994 is 26.08.2022. The present appeal was filed on 11.11.2022 i.e. beyond the statutory period of two months but within the condonable period of one month . It is accordingly held that the appeal was filed well within the period of limitation. Commissioner (Appeals) has failed to observe the same. The appeal is remanded back to Commissioner (Appeals) for the decision on the merits of the case - appeal allowed by way of remand.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal were:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Whether the appeal was barred by limitation under Section 85 of the Finance Act, 1994 The relevant legal framework is Section 85 of the Finance Act, 1994, which prescribes the limitation period for filing appeals before the Commissioner (Appeals). The limitation period is two months from the date of receipt of the Order-In-Original, with a further condonable period of one month at the discretion of the Commissioner (Appeals). The Tribunal examined the date of receipt of the Order-In-Original by the appellant, which was disputed. The appellant claimed receipt only on 26.08.2022, although the department contended that the order was dispatched on 29.04.2022 and the postal authority did not return the post undelivered. Applying the law, the Tribunal emphasized that limitation runs from the date of actual receipt of the order, not from the date of dispatch, especially when proof of delivery is absent. The Tribunal relied on authoritative precedents that mandate proof of delivery for valid service and reckoning of limitation. The Tribunal concluded that since the appellant received the order only on 26.08.2022, the appeal filed on 11.11.2022 was within the statutory two-month period plus the condonable one-month period. Therefore, the appeal was not barred by limitation. Issue 2: Validity and sufficiency of service of the Order-In-Original The Tribunal analyzed the statutory provisions governing service of orders, primarily Section 37C of the Central Excise Act, 1944, which applies mutatis mutandis to service tax matters by virtue of Section 83 of the Finance Act, 1994. The section requires service of orders and notices by registered post with acknowledgment due or by speed post with proof of delivery. The Tribunal noted that the Order-In-Original was dispatched by ordinary post without registered acknowledgment or proof of delivery. The department's only evidence was that the post was not returned undelivered, which is insufficient to establish valid service. Several precedents were cited to reinforce this principle:
Applying these precedents, the Tribunal held that the department failed to prove valid service of the Order-In-Original on the appellant. Issue 3: Discretion to condone delay and principles governing limitation The Tribunal acknowledged the principle that delay in filing appeals should not be condoned lightly, referencing the Apex Court's rulings that no one should cause prejudice to themselves by belated appeals and that reasons for delay have primacy over the length of delay. However, in the present case, since the appeal was filed within the condonable period, the Commissioner (Appeals) was obligated to condone the delay. The failure to do so was found to be erroneous. Issue 4: Application of law to facts and treatment of competing arguments The appellant's contention that the order was received only on 26.08.2022 was accepted due to the absence of proof of delivery of the order dispatched earlier. The department's argument relying on non-return of post was rejected as insufficient evidence of valid service. The Tribunal applied the legal principles and precedents mandating proof of delivery and actual receipt before limitation can commence. The competing arguments were weighed in light of statutory mandates and judicial precedents, favoring the appellant's position on the date of receipt and limitation reckoning. 3. SIGNIFICANT HOLDINGS The Tribunal held:
The core principles established include:
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