2025 (5) TMI 1621 - AT - Service Tax

Condonation of delay - COVID-19 pandemic - statutory period of limitation under Section 35(1) of the Central Excise Act 1944 - no evidence brought on record regarding service of the Speed-Post - HELD THAT - The Hon ble Supreme Court had suo moto 2022 (1) TMI 385 - SC ORDER issued an order for condoning the delay in filing of the appeal before various forums which should have been kept in mind by the Learned Commissioner (Appeals) while disposing of this appeal as not maintainable since that order of the Hon ble Supreme Court is binding on all the Appellate Authority and courts. Thus I find it appropriate to remand the matter to the learned Commissioner (Appeals) for decision on merits without further visiting the aspect of limitation. The Appellant-Assessee is directed to cooperate in the denovo proceedings and avoid taking unnecessary adjournments. All issues are kept open. The appeal filed by the Appellant is allowed by way of remand to learned Commissioner (Appeals)

Summary

1. ISSUES PRESENTED and CONSIDERED

- Whether the Order-In-Original dated 05.03.2020 was duly served upon the Assessee for the purpose of limitation in filing an appeal before the Commissioner (Appeals).

- Whether the appeal filed by the Assessee before the Commissioner (Appeals) was within the statutory period of limitation under Section 35(1) of the Central Excise Act, 1944.

- The applicability and interpretation of Section 37C(2) of the Central Excise Act, 1944 regarding the deemed service of orders by post and its impact on limitation computation.

- Whether the Commissioner (Appeals) was justified in dismissing the appeal on the ground of limitation without considering the merits, especially in light of the COVID-19 pandemic and binding Supreme Court orders condoning delays during lockdown.

- The procedural requirement and significance of maintaining postal tracking reports or acknowledgments as evidence of service for determining limitation.

- The necessity of mentioning the date of passing the order explicitly in the Order-In-Original for clarity of limitation reckoning.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Proper Service of Order-In-Original and Its Impact on Limitation

Relevant Legal Framework and Precedents: Section 35(1) of the Central Excise Act, 1944 prescribes a 60-day period for filing an appeal before the Commissioner (Appeals) from the date of communication of the order. Section 37C(2) clarifies that any decision or order shall be deemed served on the date it is passed or when it is tendered or delivered by post. The Tribunal's prior ruling emphasized that the date of actual service or delivery, not just dispatch, is relevant for limitation.

Court's Interpretation and Reasoning: The Tribunal observed that the Department relied on proof of dispatch (date of sending the order) rather than proof of actual service or delivery to the Assessee. The Court emphasized that the limitation period should be counted from the date the order was actually served, which can be ascertained by postal tracking reports. Since no evidence was produced to show that the Order-In-Original was served on the Assessee on the dispatch date, the presumption of service on that date was not justified.

Key Evidence and Findings: The Assessee claimed non-receipt of the order due to an alleged change of address, but no documentary evidence was submitted to prove intimation of address change to the Department. The appeal form (ST-5) filed before the Tribunal mentioned the Assessee's current address, indicating awareness of the correct address. The Order-In-Original did not bear the date of passing, which further complicated the reckoning of limitation.

Application of Law to Facts: Applying Section 37C(2), the date of service is critical. The absence of proof of delivery or acknowledgment from postal authorities weakened the Department's claim that the order was served on the dispatch date. The Tribunal relied on the principle that the Department must maintain postal tracking records to establish service dates conclusively.

Treatment of Competing Arguments: The Department argued that the order was dispatched on 05.03.2020 and thus served, but the Tribunal rejected this in absence of delivery evidence. The Assessee's plea of non-receipt due to address change was not substantiated, but the Tribunal noted the pandemic lockdown and Supreme Court's suo moto orders condoning delays, which the Commissioner (Appeals) failed to consider.

Conclusion: The Order-In-Original's dispatch date alone cannot be treated as the service date. The limitation period must be computed from the actual date of service, evidenced preferably by postal tracking or acknowledgment.

Issue 2: Validity of Appeal Filing Within Limitation Period

Relevant Legal Framework: The 60-day limitation under Section 35(1) of the Central Excise Act applies from the date of communication of the order. The Supreme Court's orders during the COVID-19 pandemic condoned delays in filing appeals and applications before various forums.

Court's Interpretation and Reasoning: The Tribunal found that the Assessee received the Order-In-Original on 11.07.2023, and filed the appeal on 08.09.2023, which is within the 60-day limitation period. It was noted that the Commissioner (Appeals) had dismissed the appeal as barred by limitation without appreciating the actual date of receipt and the pandemic-related condonation orders.

Key Evidence and Findings: The appeal filing date and the date of receipt of the order were established on record. No contrary evidence was presented to dispute these dates.

Application of Law to Facts: Given the actual receipt date, the appeal was timely filed. The Tribunal also emphasized the binding nature of the Supreme Court's orders condoning delays during the COVID lockdown, which the Commissioner (Appeals) should have considered.

Treatment of Competing Arguments: The Department's reliance on the dispatch date to assert limitation was rejected. The Assessee's timely filing was upheld.

Conclusion: The appeal was filed within the statutory period and was maintainable.

Issue 3: Procedural Requirements Regarding Postal Tracking and Date Mention in Orders

Relevant Legal Framework and Precedents: The Central Board of Indirect Taxes & Customs (CBIC) issued instructions emphasizing the need to maintain postal tracking reports or acknowledgments to establish service dates. The Tribunal in a prior ruling (CESTAT Final Order No. 51227/2022) mandated that orders must explicitly mention the date of passing to avoid ambiguity in limitation reckoning.

Court's Interpretation and Reasoning: The Tribunal reiterated that the Department must maintain postal tracking reports for each dispatched order to determine the limitation period accurately. The absence of the date of passing in the Order-In-Original was flagged as a procedural lapse that must be rectified.

Key Evidence and Findings: The Order-In-Original in question lacked the date of passing, and no postal tracking evidence was placed on record.

Application of Law to Facts: The failure to mention the date of passing and to maintain tracking reports undermines the Department's position on limitation and service.

Treatment of Competing Arguments: The Department was directed to issue instructions to all adjudicating authorities and Commissioners (Appeals) to ensure compliance with these procedural safeguards.

Conclusion: The procedural safeguards of recording the date of passing and maintaining postal tracking reports are essential for clarity and fairness in limitation matters.

Issue 4: Appropriateness of Remanding the Matter for Merits Consideration

Court's Interpretation and Reasoning: Since the Commissioner (Appeals) dismissed the appeal solely on limitation grounds without considering the merits, and given the findings on proper service and timely filing, the Tribunal found it appropriate to remand the matter for fresh adjudication on merits.

Key Evidence and Findings: The appeal was filed within limitation after actual receipt of the order, and the pandemic context warranted leniency in delay considerations.

Application of Law to Facts: The Tribunal directed the Commissioner (Appeals) to decide the appeal afresh on merits, with the Assessee cooperating and avoiding unnecessary adjournments.

Conclusion: The matter was remanded for merits adjudication, keeping all issues open.

3. SIGNIFICANT HOLDINGS

- "For the purpose of determination of the limitation period, the Department relies upon the date of despatch of the order, whereas it should be the date on which such order were served, which is necessary. This date can be ascertained from the tracking report of Postal Department. The Department should, therefore, maintain the postal tracking report in each case for the purpose of determining the limitation period..."

- The date on which the order is passed must be specifically mentioned in the order to avoid ambiguity in reckoning limitation.

- The Supreme Court's suo moto orders condoning delays during the COVID-19 lockdown are binding on all appellate authorities and must be considered while deciding limitation issues.

- The appeal was filed within the statutory period of 60 days from the actual date of receipt of the order and is therefore maintainable.

- The Commissioner (Appeals) erred in dismissing the appeal on limitation grounds without considering the merits, necessitating remand for fresh adjudication.