The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, has held that a tax appeal cannot be rejected as time-barred merely because the department dispatched the adjudication order and the postal article was not returned as undelivered. The Revenue must produce evidence of delivery or service in accordance with the statutory requirements.
The bench of P.K. Choudhary (Judicial Member) set aside an order rejecting a service tax appeal on limitation grounds and directed the Commissioner (Appeals) to decide the dispute on merits without reconsidering the issue of limitation.
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The dispute arose from an Order-in-Original which the department dispatched on July 12, 2022.
The assessee maintained that he received the order only on January 4, 2023, and filed his appeal before the Commissioner (Appeals) on March 10, 2023. He submitted that although the appeal was filed beyond the ordinary statutory period of 60 days, it fell within the additional condonable period of 30 days.
The Commissioner (Appeals), however, rejected the appeal as barred by limitation through an order dated December 27, 2023, without examining the underlying dispute on merits.
Challenging that decision before CESTAT, Singh disputed the department’s reliance on the date of dispatch to establish service of the adjudication order.
The department argued that the Order-in-Original had been dispatched on July 12, 2022, under Dak Dispatch Book Serial No. 3029(S/L). It also relied on the fact that the dispatched article had never been returned as undelivered.
The tribunal found that the Commissioner (Appeals) had presumed service on the basis of this dispatch evidence and the department’s assertion that the postal article had not been returned.
It held that this presumption was erroneous because the department had not produced proof of delivery.
Examining Section 37C(1)(a), the tribunal explained that, during the relevant period, service through registered post or speed post required acknowledgment due or proof of delivery to the intended person or an authorised agent.
The tribunal held that the statutory requirement placed an obligation on the Revenue to produce evidence showing that the order had actually been delivered or served.
A dispatch entry, coupled with the absence of a returned postal article, did not establish compliance with that requirement. Consequently, the April 13, 2022 order could not be deemed to have been served on Singh on the basis relied upon by the department.
In support of its conclusion, CESTAT referred to the Rajasthan High Court’s decision in R.P. Casting Pvt. Limited v. CESTAT, reported in 2016 (344) E.L.T. 168, and the Gujarat High Court’s ruling in Regent Overseas Pvt. Limited v. Union of India, reported in 2017 (6) G.S.T.L. 15 (Guj.).
It also relied on the Supreme Court’s decision in Saral Wire Craft v. CCE & ST, reported in 2015 (322) E.L.T. 192 (S.C.).
Applying these authorities, the tribunal held that the presumption of service was unsustainable in the absence of proof of delivery. The appeal before the first appellate authority therefore could not be treated as barred by limitation on that basis.
CESTAT set aside the Commissioner (Appeals)’ order and remanded the matter for adjudication on merits. Its direction expressly required the appellate authority to proceed “without further visiting the aspect of limitation.”
The appeal was accordingly allowed by way of remand. The tribunal’s decision concerns service of the adjudication order and the rejection of the appeal on limitation grounds; the substantive service tax dispute remains to be decided by the Commissioner (Appeals).
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