Whether delay in filing appeal due to non intimation of the concerned person condonable?

PJ/Case Law/2016-17/3359

Case:-NATHA RAMA AND CO. Versus CESTAT

Citation:-2016 (44) S.T.R. 414 (Guj.)

Brief facts:-The appellant company, by way of filing present tax appeal, was challenging the legality and validity of the order dated 24-8-2015 passed by the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad (for short ‘the Tribunal’) whereby, the Tribunal did not condone the delay which had occasioned in preferring the appeal.
The case of the appellant was that the appellant was engaged in manufacturing of salt at Okha Madhi Salt Works. The appellant took registration under the taxable category of Maintenance or Repair Services and Commercial or Industrial Construction Services on 14-6-2010 and holding a registration number as well. An investigation was carried out by the Central Excise Department regarding the activities of the appellant and based upon certain details gathered during the process of investigation for the years commencing from 2005-06 to 2009-10, the proceedings were initiated for the purpose of recovery of tax by issuing show cause notice on 14-10-2010. The show cause notice was based upon the fact that there was some wilful misstatement and suppression on the part of appellant whereby, there was an intention on the part of appellant to evade the payment of service tax under the provisions of Section 73(1) of the Finance Act. Said notices came to be issued at a later period also, to which the appellant had submitted a reply pointing out that there was no fraud nor any wilful misstatement nor any kind of suppression of fact or even contravention of any of the provisions of the relevant Act. Still, however, after hearing the appellant, the authority below had passed an order-in-original dated 28-6-2013/10-7-2013 and it was against that order-in-original the appellant had filed an appeal before the appellate authority, namely, Commissioner (Appeals), Central Excise, Rajkot. Said appeal also came to be dismissed vide order dated 28-8-2014 and against the said order, the appellant filed the appeal before the Tribunal. The said appeal was delayed by a period of 148 days. Resultantly, an application came to be submitted for seeking condonation of delay. The Tribunal after hearing the appeal had dismissed the application for seeking condonation of delay vide order dated 24-8-2015. It was against that order, present Tax Appeal was filed by the appellant.

Appellant’s contention:-Learned Counsel, Mr. Anand Nanavati appearing on behalf of the appellant submitted that delay of 148 days has occasioned on account of genuine cause beyond the control of the appellant and thereby, had submitted that though the said factor was submitted before the Tribunal, the Tribunal had not considered and therefore, the order was arbitrary, without assigning cogent reasons and based upon technical consideration. It was submitted by learned Counsel for the appellant that the Tribunal ought to have considered the explanation which had been given in detail not only in the memo of civil application for seeking condonation of delay but, was supported by a separate document in the form of affidavit. Learned Counsel for the appellant had drawn attention of this Court to an affidavit (Pg. 365 of the compilation) wherein, Mr. Bhavesh Madhavjibhai Parmar, partner of the appellant had categorically stated that Mr. Dinesh Nathabhai Parmar, who was the in-charge of the affairs of the company especially legal matters, had not intimated the company about the order and on account of personal work, the said legal matter, namely, present issue has not been taken care of through oversight and on account of aforesaid circumstance. This affidavit was very much placed on record before the Tribunal and therefore, delay which had been explained by submitting this affidavit ought to have been considered by the Tribunal. Considering the averments made in the civil application for seeking condonation of delay, learned Counsel for the appellant submitted that the Tribunal ought to have taken a lenient view in the matter and instead of taking hyper technical view of the matter, ought to have gone into merits of the main proceedings and thereby, requested the Court to set aside the impugned order and consequently, appeal which had been presented may be directed to be dealt with on merits and in accordance with law.

Respondent’s contention:-As against this, Mr. Jaimin Gandhi, learned Standing Counsel had submitted that the Tribunal had rightly exercised the discretion by not condoning the delay as the Tribunal found that there was no diligence or sincerity shown by the appellant in preferring an appeal. Learned Standing Counsel had submitted that a detailed affidavit in reply was filed to justify the reasons which were assigned by the Tribunal and thereby, contended that the delay of 148 days which was unexplained cogently, the order of the Tribunal may not be disturbed in the interest of justice.

Reasoning of judgment:-Having heard the learned Counsel appearing for the respective parties and on perusal of the order impugned in the present appeal, the Tribunal found that the relevant explanation which had been projected by the appellant before it has not been properly gone into and prima facie, the affidavit which had been submitted before the Tribunal ought to have been considered in right spirit. The reasons which were shown as reflected in Para 5 were not sufficient enough to substantiate the conclusion and therefore, the Tribunal was of the opinion that the delay of 148 days should not be allowed to come in the way of appellant in prosecuting the appeal on merits. It was a settled legal position of law that substantial justice was pitted against the technical consideration, the said technical consideration should not be given a predominance and therefore, considering the overall material on record and the explanation offered by the appellant, the Tribunal was of the opinion that technicality should not be allowed to come in the way of appellant to prosecute the appeal which has been filed.
Considering the overall circumstance and the material adduced before the Court coupled with explanation offered, the order impugned dated 24-8-2015 is quashed and set aside. Delay of 148 days occasioned in preferring the appeal was condoned with a request to the Tribunal to deal with the appeal filed by the appellant on its own merits and in accordance with law, as expeditiously as possible. Tax appeal was disposed of accordingly.

Decision:-Appeal disposed of.

Comment:-The gist of the case is that the assessee made an appeal to the Appellate Tribunal. But, there was a delay of 148 days in filing appeal. The assessee contended that delay occurred due to non-intimation of order by concerned person. It was apparent that reasons for delay cited by the assessee were not gone into properly and in right spirit by the Tribunal and it was a settled law that substantial justice is required to be given prominence than mere technical considerations. Hence, delay of 148 days was condoned and impugned order was set aside. The matter was remitted to the Tribunal for hearing appeal on merits in accordance with Section 35B of Central Excise Act, 1944.

Prepared by:-Praniti lalwani

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PJ/Case Law/2016-17/3359

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