Whether setting aside of order of Additional Commissioner could be ground for assessee not to file appeal before the Tribunal against the rejection of refund claim by Assistant Commissioner?

PJ/Case Laws/2012-13/1149

Case:- MINDA AUTOMOTIVE LTD VS COMMISSIONER OF CENTRAL EXCISE-DELHI-III

Citation: - 2012 (280) E.L.T. 238 (Tri-Delhi)
Issue: -Whether setting aside of order of Additional Commissioner could be ground for assessee not to file appeal before the Tribunal against the rejection of refund claim by Assistant Commissioner?

Brief fact: - The Assistant Commissioner had rejected the claims for refund filed by the assessee under Rule 5 of Cenvat Credit Rules, 2004 on the ground that input services on which the appellants had availed Cenvat credit, were not eligible input services, relying upon the order passed by the Additional Commissioner of Central Excise, Gurgaon wherein Cenvat credit on service tax paid on several input services received by the applicants, an EOU unit was denied on the ground that services received by the unit were not eligible input services. However, the order of the Additional Commissioner was set aside by the lower Appellate Authority and in the light of his order; the assessee became eligible to refund of un-utilized credit of input service. In the present impugned order, the Commissioner (Appeals) has dismissed the appeals filed by the assessee on the ground that the earlier order of the Assistant Commissioner wherein refund applications of the appellants were rejected, was not challenged by them, which is factually incorrect, as appeals had been preferred against the rejection of the refund claims.

Appellant Contention :- The Appellant submits that in the present case, they did not file appeal against the orders of the Assistant Commissioner rejecting their refund claim for the reason that the only ground on which the Assistant Commissioner has rejected their refund claims was that the Additional Commissioner vide order in original No. 03/VKB/ADC/CE/2008 dated 28-2-2008 had disallowed the Cenvat credit taken by the appellants on the ground that the services on .which the credit was availed were not input services and as such, no credit was available to the appellants. In view of the fact that the order of the Additional Commissioner dated 28-2- 2008 was alive and kicking at the time the order in original dated 2-12-2008 rejecting the refund claim was passed by the Assistant Commissioner; the appellants did not deem or contemplate that any worthwhile purpose would be served in filing appeal against the rejection of the refund claim. As the Department was seeking to join both the issues that is the issue of refund of unutilized Cenvat credit of input services and the issue of availability of Cenvat credit of the input services to the appellants. The appellants finally concluded that till the time the order of the Additional Commissioner denying them the credit of the input services is set aside by an appellate authority or it attains finality their refund of the unutilized Cenvat amount will not be processed and department will keep on joining both the issues and as such no worthwhile purpose can be served in filing appeal before the Commissioner (Appeals)."

The further submission of the assessee that against the impugned orders challenged in the present appeals, the assessee preferred Writ Petition before the Punjab & Haryana High Court on 15-2-2010 which stood dismissed on 27-7-2010 on the ground of availability of alternative remedy before the Tribunal. Therefore, they submit that the delay was not deliberate but only due to above reasons and therefore, pray that such delay may be condoned.

Reasoning of Judgment: The Tribunal is not satisfied with the reasoning given in the COD applications each order by which an assessee is aggrieved is required to be challenged before the higher forum within the statutory period of limitation. The fact that the order of the Additional Commissioner upholding that services received by the assessee were not eligible input services was set aside by the Commissioner (Appeals), is no ground for the assessee not to file appeals before the Tribunal against the rejection of the refund claims. The Hon'ble High Court has also not condoned the delay in filing appeals before the Tribunal against the ten orders challenged in the present appeals. Tribunal note that in the case of Balwant Singh N Jagdish Singh reported in 2010 (262) E.L.T. 50 (S.C.), the Apex Court has held that delay is just one of the ingredients which has to be considered by the Court and in addition to this, the Court also take into account conduct of the parties, bona fide reasons for condonation of delay and whether delay is easily avoidable by the applicant acting with normal care and caution.

Tribunal makes a reference to the judgement of this court in Perumon Bhagvathy Devaswom (Supra). In this case, the Court, after discussing a number of judgments of this Court as well as that of the High Courts, enunciated the principles which need to be kept in mind while dealing with applications filed under the provisions of Order 22, CPC along with an application under Section 5, Limitation Act for condonation of delay in filing the application forbringing the legal representatives on record. the Court held as under that an applicant must essentially satisfy the required ingredients; then alone the Court would be inclined to condone the delay in the filing of such applications.

The assessee has not put forth bona fide reasons for condonation of delay and further the delay could easily be avoided by the assessee acting with normal care and caution.

The Tribunal holds that sufficient cause has not been made out for condoning the delay. The COD applications are therefore, dismissed and as a result, the appeals are dismissed as barred by limitation.

Decision: -Appeal dismissed

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PJ/Case Laws/2012-13/1149

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