The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, has held that service of an adjudication order by affixing it at the taxpayer’s registered premises could not be disregarded merely because the taxpayer claimed to have obtained a copy later. 

Upholding the dismissal of an appeal as time-barred, the Sanjiv Srivastava (Technical Member) reiterated that the Commissioner (Appeals) cannot condone delay beyond the additional period permitted by the service tax law.

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The central issue was whether the limitation period for filing an appeal should run from the date on which the department said the adjudication order had been pasted at the taxpayer’s registered premises, or from the later date on which the taxpayer claimed to have obtained a copy.

The dispute also concerned the statutory limit on the Commissioner (Appeals)’ power to condone delay under Section 85(3A) of the Finance Act, 1994.

The proceedings originated from information received from the Income Tax Department concerning receipts for the financial year 2016–17. On examining that information, the service tax authorities alleged that the taxpayer had failed to discharge service tax liability of ₹24,60,044.

A show cause notice dated October 20, 2021, proposed recovery of the tax, interest and penalties. The allegations included suppression of facts, failure to obtain service tax registration, non-filing of ST-3 returns and failure to furnish information or documents sought by the department.

The adjudicating authority passed an order on March 11, 2023, confirming the tax demand with interest. It also imposed a penalty equal to the tax amount under Section 78 and separate penalties of ₹10,000 each under Sections 77(1)(a), 77(2) and 77(1)(c).

The taxpayer filed an appeal before the Commissioner (Appeals) on February 28, 2024, contending that the adjudication order had been received only on January 29, 2024.

According to the taxpayer, he visited the Assistant Commissioner’s office in Jaunpur for another purpose and then learnt that a demand order had been passed against him. He claimed that, upon requesting a copy, he obtained only an uncertified photocopy from the departmental file.

On that basis, he argued that January 29, 2024, should be treated as the date of receipt for calculating the appeal period.

The Commissioner (Appeals), however, sought a departmental report regarding service. The jurisdictional office reported that the order had initially been dispatched through registered post, but the postal article was returned undelivered. It was thereafter served by affixing it at the main door of the taxpayer’s premises under a panchnama dated April 27, 2023.

Treating that as the date of service, the Commissioner (Appeals) dismissed the appeal as having been filed approximately ten months later.

Before CESTAT, the taxpayer challenged the dismissal on limitation and argued that a copy of the panchnama had not been supplied.

The Tribunal observed that the address at which the adjudication order had been affixed was the same address mentioned in the appeals before both appellate forums. The taxpayer had also used that address in the challans relating to the mandatory pre-deposit.

It further noted that the subsequent appellate order, when sent by post to the same address, had also been returned. The Tribunal considered these circumstances relevant in evaluating the taxpayer’s denial of service.

Accepting the departmental record concerning affixation, the Tribunal found no reason to believe that the adjudication order had not been served at premises which the taxpayer continued to hold. It therefore rejected the contention that the appeal period should begin only when the taxpayer later obtained a copy.

Section 85(3A) provides two months from receipt of the adjudication order to present a service tax appeal. The Commissioner (Appeals) may permit filing within a further month upon being satisfied that sufficient cause prevented timely filing.

The Tribunal relied on the Supreme Court’s decision in Singh Enterprises v. Commissioner of Central Excise, Jamshedpur, which recognises that an appellate authority cannot extend the condonable period beyond the limit fixed by statute.

It also referred to Pathapati Subba Reddy (Died) by LRs v. Special Deputy Collector (LA) and Glaxo Smith Kline Consumer Health Care Ltd., concerning limitation and the need to substantiate explanations for delayed proceedings.

CESTAT ultimately upheld the Commissioner (Appeals)’ decision and dismissed the appeal. The ruling leaves the adjudicated demand and penalties undisturbed; it does not independently decide the substantive taxability of the underlying receipts.

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