R. Gowrishankar Vs. Commissioner of Service Tax [Madras High Court, 13-06-2016]

Constitution of India – Article 226 – While the High Court exercising the jurisdiction under Article 226 of Constitution of India, approves the correctness of the order of the appellate authority, it has no power to direct the appellate authority to consider the appeal on merits as otherwise it would be nothing but Court extending the period of limitation.


IN THE HIGH COURT OF JUDICATURE OF MADRAS

DATED: 13.06.2016

CORAM: THE HONOURABLE MR.JUSTICE S.MANIKUMAR and THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR

Writ Appeal No.589 of 2016 C.M.P.No.7766 of 2016

R. Gowrishankar … Appellant -vs- 1. The Commissioner of Service Tax (Appeals)-I, 26/1, M.G.Marg, Nungambakkam, Chennai 600 034. 2. The Additional Commissioner of Service Tax, Service Tax II Commissionerate, “Newry Towers”, 3 rd Floor, 2054-I, 2 nd Avenue, Anna Nagar, Chennai-40. … Respondents Writ Appeal filed under Clause 15 of Letters Pattent, against the order dated 22.02.2016 in W.P.No.5194 of 2016.

For Appellant : Mr.K.Senguttuvan For Respondents : Mr.A.P.Srinivas, Senior Standing Counsel for Customs

JUDGMENT

[ Judgment of the Court was made by S. MANIKUMAR, J.]

Challenge in this appeal is to an order, made in W.P.No.5194 of 2016, dated 22.02.2016, passed by the Writ Court, declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals)-I, Chennai, 1 st respondent herein.

2. Short facts leading to the appeal are that the appellant suffered an Order in Original No.114 of 2010, dated 29.10.2010, passed by the Additional Commissioner of Service Tax, Service Tax II Commissionerate, Chennai, 2 nd respondent herein, by which, he has disallowed CENVAT Credit of Rs.13,51,316/- and Rs.1,26,776/- and demanded the same from the appellant, vide Show Cause Notice No.122/09, dated 03.04.2009 and No.23/2009, dated 28.07.2009 respectively, under

Rule 14 of the CENVAT Credit Rules, 2004

r/w. Section 73(1) of the Finance Act, 1994. He also demanded interest, applicable at the rate payable on the above mentioned demands, under Rule 14 of the CENVAT Credit Rules, 2004, r/w.

Section 75 of the Finance Act, 1994.

In the same order, he also imposed penalty of Rs.14,78,092/-, under Rule 15(4) of the CENVAT Credit Rules, 2004, r/w. Section 78 of the Finance Act, 1994. However, penalty was restricted to 25% of the said amount, if the tax dues along with applicable interest determined is paid along with the reduced penalty, within 30 days from the date of receipt of the order, in terms of proviso to Section 78 of the Finance Act.

3. Being aggrieved by the same, the appellant filed an appeal under Section 85 of the Finance Act, to the Commissioner of Service Tax (Appeals)-I, Chennai, 1 st respondent herein, with a delay of 223 days in filing the appeal. The reason for the delay is that the person, dealing with service tax matters, in their organisation, had left the service, leaving the relevant papers in disarray. Upon perusal of the records, the 1 st respondent noticed that the date of issue of the Order-in-Original was 29.10.2010; copy of the order was received by the appellant on 01.11.2010; and the appeal was filed on 12.09.2011. As per Section 85 of the Finance Act, 1994, as it existed during the material point of time (prior to 28.05.2012), an appeal ought to have been filed before the Commissioner (Appeals), within three months from the date of communication of the order and the Commissioner (Appeals) is empowered to condone the delay of a further period of three months, if he is satisfied that the appellant was preferred by sufficient cause from presenting the appeal. As the delay was beyond the condonable period, provided under the statute, the 1 st respondent herein, vide order in Appeal No.10/2014(M-ST), dated 01.12.2014, dismissed the appeal.

4. Being aggrieved by the abovesaid order, the appellant has filed W.P.No.5194 of 2016, for a Writ of Certiorarified Mandamus, to quash the Order-in-Appeal No.10 of 2014, dated 01.12.2014 passed by the 1 st respondent herein and consequently, direct the 1 st respondent to decide the case on merits. On behalf of the department, the Assistant Commissioner of Central Excise, incharge of legal section, filed a counter affidavit, opposing the prayer sought for and further contended that the Commissioner (Appeals) has no power to condone the delay beyond the statutory period. Reliance has been placed on the decisions in

Singh Enterprises v. CCE, Jamshedpur reported in 2008 (221) ELT 163 (SC)

Commissioner of Customs & Central Excise v. Hongo India (P) Ltd., reported in 2009 (236) ELT 417 (SC)

Gopinath v. CESTAT, Chennai reported in 2013 (32) STR 172 (Mad.)

Albert v. Commissioner of Service Tax, Chennai reported in 2015 (37) STR 187 (Mad.)

and

Saradha Travels v. Commissioner of Service Tax reported in 2015 (3) STR 433 (Mad.).

5. In the counter affidavit, the Assistant Commissioner of Central Excise has further contended that though the Commissioner (Appeals) has dismissed the statutory appeal on 01.12.2014, writ petition has been filed only on 27.01.2016, with a delay of 400 days and that there was not only delay, but laches on the part of the appellant. A contention has also been made that recovery proceedings have already been initiated by the department, vide C.No.IV/16/145/2008-SU0201, dated 08.12.2015, followed by a reminder, dated 08.01.2016.

6. After considering the decisions in

Kranti Associates Pvt. Ltd., v. Masood Ahmed Khan reported in 2011 (273) ELT 345

and

Collector, Land Acquisition, Anantnag and another v. Mst.Katiji and others reported in 1987 (28) ELT 185 (SC)

and

Albert v. Commissioner of Service Tax, Chennai reported in 2015 (37) STR 187 (Mad.)

and on the facts and circumstances of the case, by observing that there is no error or illegality in the order passed by the Commissioner (Appeals), dated 01.12.2014, writ Court, vide order, dated 22.02.2016, dismissed the writ petition. Being aggrieved by the same, the instant appeal has been filed.

7. The main contentions of the appellant are that when the order passed by the Additional Commissioner of Service Tax, Chennai, 2 nd respondent herein, is against the principles of natural justice and goes to the root of of the matter, denying fair opportunity, the Writ Court ought to have directed the 1 st respondent herein to decide the case, on merits.

8. According to Mr.K.Senguttuvan, learned counsel for the appellant, when the Commissioner of Service Tax (Appeals)-I, Chennai, does not enjoy the power to condone the delay, beyond the statutory period, an aggrieved person has no other alternative remedy, except to approach this Court, under Article 226 of the Constitution of India and having regard to the grievances of the appellant, the Writ Court ought to have condoned the delay. He also submitted that when the appellant has raised an important question that the quasi-judicial authority ought to have recorded reasons for condoning the delay, the Writ Court has failed to advert to the same.

9. Learned standing counsel for the Revenue submitted that there is no material irregularity in the order impugned and prayed for dismissal of the appeal. In support of the rival contentions, both the learned counsel relied on several decisions.

Heard the learned counsel appearing for the parties and perused the materials available on record.

10. Now let us consider the decisions relied on by the learned counsel appearing for both parties.

11. In