2025 (6) TMI 1599 - AT - Service Tax

Power to condone delay - Jurisdiction of Commissioner (Appeals) to condone the delay in filing the appeal beyond the prescribed statutory period under Section 85(3A) of the Finance Act 1994 - 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. Conclusion - The appeal filed beyond the prescribed limitation period and condonation window rightly dismissed by the Commissioner (Appeals). 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 and authority to condone the delay in filing the appeal beyond the prescribed statutory period under Section 85(3A) of the Finance Act, 1994, as amended by the Finance Bill, 2012, particularly when the appeal was filed after more than one year from the receipt of the original order. The issue also involves the interpretation of the limitation period and the scope of the power to condone delay granted to the Commissioner (Appeals) under the proviso to Section 85(3A).

2. ISSUE-WISE DETAILED ANALYSIS

Issue: Jurisdiction and power of the Commissioner (Appeals) to condone delay beyond the 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 inserted by the Finance Bill, 2012, mandates that an appeal relating to service tax, interest, or penalty must be filed within two months from the date of receipt of the order of the adjudicating authority. The proviso to this subsection empowers the Commissioner (Appeals) to condone delay for a further period of one month if satisfied that the appellant was prevented by sufficient cause from filing the appeal within the initial two-month period.

The Supreme Court decision in M/s Singh Enterprises [2008 (221) E.L.T. 163 (SC)] was heavily relied upon by the Court. That decision interpreted the analogous provisions under Section 35 of the Central Excise Act, 1944, which similarly prescribed a limitation period of sixty days with a further condonation period of thirty days. The Supreme Court held that the appellate authority's power to condone delay is strictly limited to the additional period specified in the statute and cannot be extended beyond it. The Court emphasized that the statutory limitation periods and the condonation window are exhaustive and exclude the application of Section 5 of the Limitation Act, 1963, which generally allows extension of limitation on sufficient cause.

Court's interpretation and reasoning: 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 prescribed under Section 85(3A) and the one-month condonation period allowed under the proviso. The Tribunal observed that the Commissioner (Appeals) correctly dismissed the appeal on the ground of limitation, as the appellant failed to file the appeal within the prescribed period or the condonation period.

Relying on the Supreme Court's ruling in M/s Singh Enterprises, the Tribunal reiterated the principle that the appellate authority's power to condone delay is statutorily circumscribed and cannot be extended beyond the prescribed limit. The Tribunal rejected any argument that the general provisions of the Limitation Act could be invoked to extend the limitation period beyond the statutory cap. It was held that permitting such an extension would render the specific statutory provisions meaningless.

Key evidence and findings: The appellant had filed the appeal after more than a year from the date of receipt of the original order. The appellant's explanation for the delay was that the business was practically closed for a period and that the appeal was handed over to a consultant immediately after receipt of the order. The Tribunal found this explanation insufficient and not constituting "sufficient cause" under the statute.

Application of law to facts: Applying the statutory provision and the binding Supreme Court precedent, the Tribunal found that the appeal was barred by limitation. The statutory scheme clearly limits the condonation of delay to one month beyond the two-month filing period. Since the appeal was filed beyond this period, the Commissioner (Appeals) had no jurisdiction to entertain the appeal, and the dismissal was legally justified.

Treatment of competing arguments: The appellant's reliance on the general provisions of the Limitation Act and other decisions where courts condoned delay was rejected. The Tribunal distinguished such decisions on the ground that the statute in question expressly excludes the application of Section 5 of the Limitation Act by prescribing a specific limitation and condonation period. The Tribunal also noted that the appellant's explanation did not amount to sufficient cause as contemplated by the statute or the precedent.

Conclusions: The Tribunal concluded that the appeal was rightly dismissed by the Commissioner (Appeals) on the ground of limitation. The power to condone delay is strictly limited and cannot be extended beyond the statutory period. The appeal filed after more than a year was barred and not maintainable.

3. SIGNIFICANT HOLDINGS

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

"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."

Core principles established include:

• The limitation period prescribed by the statute for filing appeals is mandatory and not extendable beyond the prescribed condonation period.
• The power of the Commissioner (Appeals) to condone delay is strictly limited to the statutory period and excludes the application of general limitation extension provisions under the Limitation Act.
• An explanation for delay must constitute "sufficient cause" as understood in the statutory context and cannot be based on general or vague reasons.

Final determination:

The appeal filed beyond the prescribed limitation period and condonation window was rightly dismissed by the Commissioner (Appeals). The Tribunal upheld the dismissal and found no merit in the appeal, thereby affirming the strict interpretation of limitation provisions under the Finance Act, 1994.