The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai, has held that an appeal cannot be rejected for failure to produce proof of a mandatory pre-deposit when the appellate authority has itself recorded that the payment was made and observed that a procedural deficiency relating to an authorisation letter should ordinarily be addressed by allowing the appellant an opportunity to rectify it before dismissing an otherwise maintainable appeal.
The bench of Ajay Sharma (Judicial Member) and M.M. Parthiban (Technical Member) set aside the order rejecting the appeal and remanded the matter to the Commissioner (Appeals) for fresh consideration on merits.
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The company approached the Tribunal against an order passed by the Commissioner (Appeals-II), CGST & Central Excise, Mumbai.
The Commissioner (Appeals) had rejected the company’s appeal on two grounds: failure to furnish valid proof of the mandatory pre-deposit required under Section 35F of the Central Excise Act, 1944, and failure to produce the requisite authorisation letter.
Before the Tribunal, the company filed an application seeking an out-of-turn hearing of its service tax appeal. Advocate Vinay Ansurkar appeared for the company, while Superintendent S.B.P. Sinha represented the Revenue.
The company’s counsel pointed out that paragraph 4 of the Commissioner (Appeals)’ order expressly recorded that the appeal had been filed after making a pre-deposit of ₹3,71,472 through an e-receipt dated December 12, 2023.
The company argued that, in view of this recorded acknowledgment, the appeal could not have been rejected for non-furnishing of proof of the same payment.
Finding merit in the submission, the Tribunal allowed the early-hearing application. With the consent of both sides, it also took up the appeal itself for disposal, noting that the Commissioner (Appeals) had rejected it without examining the merits of the dispute.
The Tribunal found a contradiction between the appellate authority’s acknowledgment of the pre-deposit and its subsequent decision to reject the appeal principally for want of proof of that payment.
It held that once the Commissioner (Appeals) had noticed that the requisite pre-deposit had been made, rejection on the ground of non-production of its proof was unwarranted.
The bench further observed that if the authority had any doubt about the payment or the supporting document, the company should have been given an opportunity to clarify the position or furnish the necessary material before its appeal was rejected.
The ruling therefore turned on the treatment of a payment already acknowledged in the appellate order; it did not dispense with the mandatory pre-deposit requirement.
On the second ground of rejection, the company’s counsel submitted that the authorisation letter had, in fact, been furnished before the Commissioner (Appeals), but the authority had failed to consider it.
The Tribunal observed that, even otherwise, a procedural deficiency of this nature could not ordinarily justify dismissal without an opportunity to rectify it, particularly where the appeal was otherwise maintainable.
The bench reiterated that an appeal cannot be rejected merely because of a procedural lapse and considered it appropriate to grant the company another opportunity to produce the authorisation letter before the Commissioner (Appeals).
The Tribunal remanded the matter to the Commissioner (Appeals) for fresh consideration and a decision on merits.
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