The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the statutory limitation period for filing an appeal cannot begin unless the adjudication order has been validly communicated to the assessee.
Setting aside the order of the Commissioner (Appeals), the bench of P.K. Choudhary (Judicial Member) ruled that an ex parte order allegedly served through affixation at an incorrect location did not amount to valid service under law and remanded the matter to the adjudicating authority for fresh consideration.
The appeal arose from an order of the Commissioner (Appeals), CGST & Central Excise, Allahabad, who had dismissed the assessee’s appeal solely on the ground that it was barred by limitation without examining the case on merits. The original adjudication order had been passed ex parte after the assessee allegedly failed to respond to the show cause notice and personal hearing notices.
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The appellant contended that neither the show cause notice nor any hearing notice had ever been served. According to the appellant, the Order-in-Original dated March 11, 2023, sent through registered post, was returned undelivered. The assessee claimed that it became aware of the adjudication order only on January 30, 2024, after Form GST DRC-07A reflecting the demand was uploaded on the GST portal. Upon obtaining a copy of the order on that date, the appeal was filed on February 28, 2024, well within the prescribed statutory period.
The department defended the dismissal of the appeal by producing a communication from the Assistant Commissioner along with a panchnama showing that the Order-in-Original had been served by affixing it on the appellant’s premises on April 27, 2023, after postal delivery failed. Based on this alleged service, the Commissioner (Appeals) had treated April 27, 2023, as the date of communication and consequently held the appeal filed in February 2024 to be time-barred.
The appellant disputed the validity of this affixation, arguing that the panchnama witnesses were unknown to him and were not residents of the locality where the alleged affixation took place.
After examining the panchnama and hearing both parties, the Tribunal found significant deficiencies in the manner in which the alleged service had been effected.
The Tribunal observed that instead of securing independent witnesses from the neighbourhood or local area, the Department relied upon witnesses from Faizabad and Jaunpur. It further noted that the panchnama itself recorded that the appellant’s business unit or residence did not exist at the location where the order had been affixed. The witnesses had also stated that persons present at the site were unaware of either the appellant or his business establishment, and the appellant himself was not present during the affixation.
According to the Tribunal, these facts clearly demonstrated that the adjudication order had not been effectively communicated to the appellant.
The Tribunal further held that the Department had failed to comply with the mandatory requirements of Section 37C governing service of orders.
It observed that where service is effected by affixation, the copy of the order must be affixed at the factory, place of business, or residence of the person concerned. Since the panchnama itself showed that the affixation was carried out at a place that was neither the appellant’s business premises nor his residence, the statutory requirements for valid service were not fulfilled.
Consequently, the Tribunal ruled that the alleged affixation on April 27, 2023, could not be treated as the date of communication. Instead, the date on which the appellant actually received the copy of the adjudication order—January 30, 2024—had to be regarded as the relevant date for computing limitation. As the appeal had been filed on February 28, 2024, it was within the statutory period prescribed for filing an appeal before the first appellate authority.
Having concluded that the appeal had been wrongly rejected as time-barred, the Tribunal remanded the matter to the adjudicating authority for fresh adjudication.
The Tribunal noted that since the appellant had not participated in the original proceedings, relevant documents had not been examined by the adjudicating authority. It therefore directed the authority to undertake a de novo adjudication after granting the appellant an opportunity to present its case. The appellant was also directed to cooperate with the proceedings and refrain from seeking unnecessary adjournments.
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