CONDONATION OF DELAY IN FILING APPEAL UNDER SERVICE TAX PROVISIONS

[Mr. M. GOVINDARAJAN]

APPEAL PROVISIONS:

                        Sec. 84 of Finance Act, 1994 provides power for adjudication of penalty in service tax cases.  It states that the proper Central Excise Officer who has been conferred with power of adjudication shall adjudge penalty which a person is liable to pay under the service tax provisions. CBEC may notify power of adjudication for the purpose of imposing penalty.   Sec. 85 of the Act provides mechanism of appeal to an aggrieved assessee against the order of adjudicating authority subordinate to the Commissioner of Central Excise.  The Commissioner (Appeals) is empowered to hear the appeal and make such order as he thinks fit. The appeal shall be made to the Commissioner of Central Excise (Appeals) within three months from the date of the order sought to be appealed.

                        Sec. 86 of the Act provides for the appeals to appellate tribunal.  It is the second level of appellate forum for making an appeal against an order passed for escaped service tax under Sec. 73 or for adjudicating penalty under Sec. 83A or against the order of Commissioner of Central Excise under Sec. 84, or against the order of the Commissioner of Central Excise (Appeals) under Sec. 85.  Before the tribunal appeal may be filed either by the Revenue or by the assessee.  The appeal before the tribunal shall be made within three months of the receipt of the order sought to be appealed against.

CONDONATION OF DELAY:

                        Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the period of three months, allow it to be presented within a further period of three months.  Commissioner (Appeal) is not having power to condone the delay after the extended period of three months.

                        The appellate tribunal may admit an appeal after the expiry of three months if it is satisfied that there was sufficient cause for not presenting it within that period. Appellate tribunal has to condone the delay for any days provided if it is satisfied that there was sufficient cause not presenting it within the prescribed period of three months.

CASE LAWS:

                        The criteria required for condoning the delay is the appellate authority is to convince itself that the delay caused in filing appeal is for sufficient reasons. The law does not indicate what are the reasons that can be considered as 'sufficient reasons'. It is differing from case to case based on the facts and circumstances of the case. In this article six case laws are given for the same:

1.      Bhalchandra Mailing Services V. Commissioner of Central Excise, Pune - III - 2008 -TMI - 31047 - CESTAT MUMBAI ]

2.      The tribunal condoned the delay of 35 days in preferring the appeal, as if it is satisfied with the explanation given in the application for condonation of delay, viz., that after the hearing of the case by the Commissioner (Appeals), their consultant went abroad for some other work and on his return he was consulted and he advised the applicants to re-agitate the issue before the Commissioner (Appeals) by submitting documentary evidence, which they were called upon to produce, by the Commissioner (Appeals) but could not do so, even though time had been granted for the purpose and approach the Commissioner (Appeals) with the copies of evidence relied upon and the office of the Commissioner (Appeals) communicated to them that their request for another opportunity could not be considered and directed them to appeal before the tribunal. 

3.      Gosson Air conditioning V. Commissioner of Central Excise, Chandigarh - [2009 -TMI - 32826 - PUNJAB & HARYANA HIGH COURT]

The writ petition is filed against the order of the tribunal. The tribunal dismissed the appeal on the ground that the petitioner has failed to make out a sufficient cause for condonation of delay of 105 days in preferring the appeal.  In the application for condonation of delay the appellant pleaded that since the factory of the petitioner was lying closed since February 1999 one of its representatives was called to the office of the Central Excise Department and was served with order dated 08.08.2002. The said representative shifted to Delhi without informing the management about the receipt of the said order and later on the management learnt about the same it took steps to file appeal.

The tribunal has observed that the bald plea of the appellant that the order of the Commissioner was brought to Director's notice only on 25.03.03 was not a sufficient reason to condone the delay. The tribunal has also not found any substance in the stand of the petitioner that though the administrative activities were closed since February 1999, but still its representatives were pursuing the matter with the lower authorities, even in the year 2001 and therefore the Commissioner's order should have been brought to their notice.

The High Court is of the view that the case is to be considered with pragmatism in a judicial oriented approach, rather than the technical deletion of sufficient cause. The principle of Natural Justice is to be followed. None should be condemned unheard. The High Court remanded the case to the Commissioner for deciding the appeal on merits.

4.      Kedia Agglomerated marbles Limited V. Commissioner of Central Excise, Vadodara - II - [2008 -TMI - 3208 - TRIBUNAL AHMEDABAD]

5.      The tribunal held that it had been clearly admitted that the Director did not realize the importance of challenging the impugned order and it was only through casual discussions that the matter was, later on, forwarded to their Advocate.   This reflects upon the casual attitude of the appellants and by no stretch of imagination can be construed to be a compelling reason for not filing the appeal in time. It is settled law that each day's delay, after the expiry of limitation period is required to be explained. There is nothing on record to justify such an action on the part of the applicants.   The tribunal accordingly rejected the prayer for condoning the delay in filing the present appeal.

6.      BSNL V. Commissioner of Central Excise, Jaipur - II - [2008 -TMI - 31203 - CESTAT NEW DELHI]

The applicant filed application for condoning the delay of 85 days in filing the appeal explaining the reasons for delay.   The tribunal satisfied with the explanation condoned the delay.

7.      Ballarpur Industries Limited V. Commissioner of Central Excise, Pune - II - [2008 -TMI - 31242 - CESTAT MUMBAI]

8.      The applications are filed for condoning the delay in filing the supplementary appeal. On perusal of the record the tribunal found that the main appeal was filed in time.  Hence the tribunal condoned the delay in filing the appeal.

9.      Sonata Ceramics (P) Ltd., V. Commissioner of Central Excise, Ahamedabad - [2008 -TMI - 31442 - CESTAT AHMEDABAD]

In this case the order of the Commissioner dated 07.08.06 is admittedly received on 16.08.06.  The appellant claims to have given the papers for filing the appeal with the consultant before expiry of three months time of filing the appeal.   The Consultant was suffering from hypertension for which a medical certificate has been produced. The file was misplaced and located only in July 2007 and therefore there is a delay of nearly a month and seeks condonation of the same. The department submitted that the consultant has been attending to the tribunal on many days during the period of 9 months. The tribunal held that no valid reasons have been given for the undue delay of 9 months and therefore it is not a fit case for condonation of the delay. The application is rejected as time barred.