Director of Mines and Geology vs C.C.E. (Appeals-II)

N. Kumar, J.—The State has preferred this appeal challenging the order passed by the Tribunal as well as the Appellate Authority, which has dismissed the appeal preferred by the State against the order of the Adjudicating Authority. The assessee, the Director, Department of Mines and Geology is a holder of Service Tax Registration under the category of "Technical Inspection and Certificate Services" as defined u/s 65(108) of the Finance Act, 1994 (for short hereinafter referred to as the Act). The assessee received an amount of Rs. 49,45,369/- towards fees for "Technical Inspection and Certificate Services" for the period from July 2003 to March 2006. The assessee failed to pay/remit the service tax along with the education cess leviable thereon amounting to Rs. 4,51,901/- to the Government Treasury. A show cause notice was issued to the assessee calling upon them to show cause why service tax and education cess amounting to Rs. 4,51,901/- should not be levied on them and also why penalty should not be imposed on them under Sections 76, 77 and 78 of the Act. In pursuance of the said show cause notice, the assessee filed its reply denying the liability. On a consideration of the said objections, an order-in-original came to be passed on 18-8-2008 as per Annexure-E confirming the service tax and education cess and also the interest. The assessee received a copy of the said order on 29-8-2008. Thereafter, they preferred an appeal to the First Appellate Authority i.e., the Commissioner of Central Excise (Appeals-II) on 17-8-2009 with an application for condonation of delay. The said appeal came to be dismissed by an order dated 28-10-2009 as barred by limitation. Aggrieved by the said order of the Appellate Authority, the assessee preferred an appeal to the Tribunal. The Tribunal by the impugned order dated 29-4-2010 has dismissed the appeal affirming the order of the lower authorities. Aggrieved by the said order, the present appeal is filed.

The learned Counsel appearing for the assessee assailing the impugned order contends that the assessee being an instrumentality of the State is not liable to pay any service tax at all end therefore, the order-in-original passed by the Adjudicating Authority is void ab initio. Though there is some delay in preferring the appeal and the application filed for condonation of delay shows the sufficient cause for the delay, the Appellate Authority committed a serious error in holding that the delay cannot be condoned as it is filed beyond the period prescribed under the law and accordingly, dismissed the appeal. The Tribunal has not properly appreciated the relevant provision and committed a serious error in upholding the order of the Appellate Authority. Hence, interference is called for. In support of his contention he relies on the judgment of this Court in the case of Praxair India Pvt. Ltd. Vs. Commissioner of C. EX. and S.T., where delay of 229 days in preferring the first appeal was condoned. There was a delay of 229 days in preferring the original appeal before the CESTAT and contends that the delay ought to be condoned. He also relies on the judgment of the Apex Court in the case of State of Haryana Vs. Chandra Mani and others,

In the light of the aforesaid facts and the rival contentions, the point that arise for consideration in this appeal is:

Whether the provisions of the Limitation Act is attracted to an appeal preferred u/s 85 of the Act before the Commissioner of Central Excise (Appeals)?

Section 85 of the Act reads as under:-

Section 85. Appeals to the Commissioner of Central Excise (Appeals)

(1) Any person aggrieved by any decision or order passed by an adjudicating authority subordinate to the Commissioner of Central Excise may appeal to the Commissioner of Central Excise (Appeals).

(2) Every appeal shall be in the prescribed form and shall be verified in the prescribed manner.

(3) An appeal shall be presented within three months from the date of receipt of the decision or order of the such adjudicating authority, relating to service tax, interest or penalty under this Chapter:

Provided that the Commissioner of Central Excise (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within a further period of three months.

(4) The Commissioner of Central Excise (Appeals) shall hear and determine the appeal and, subject to the provisions of this Chapter, pass such orders as he thinks fit and such orders may include an order enhancing the service tax, interest or penalty:

Provided that an order enhancing the service tax, interest or penalty shall not be made unless the person affected thereby has been given a reasonable opportunity of showing cause against such enhancement.

(5) Subject to the provisions of this Chapter, in hearing the appeals and making orders under this section, the Commissioner of Central Excise (Appeals) shall exercise the same powers and follow the same procedure as he exercises and follows in hearing the appeals and making orders under the Central Excise Act, 1944.

A perusal of the aforesaid provision makes it clear that a right of appeal is created in favour of an assessee to challenge an order passed by the Adjudicating Authority subordinate to the Commissioner of Central Excise. The appeal lies to the Commissioner of Central Excise (Appeals). The appeal shall be preferred in the prescribed form and verified in the prescribed manner. Sub-section (3) of Section 85 provides the period of limitation within which such an appeal is to be filed. It provides three months time to prefer an appeal from the date of receipt of the decision or order of such Adjudicating Authority. A proviso to the said provision makes it clear that if the appeal is not filed within three months as prescribed under sub-section (3) of Section 85, the Commissioner of Central Excise (Appeals) is vested with the power to condone the delay if sufficient cause is made out for the delay in preferring the appeal. However, the said delay cannot exceed three months in addition to the period of three months prescribed for preferring an appeal. Therefore, the Act provides for a period of limitation as well as the provision for condoning the delay. Therefore, when an express provision is made for a period of limitation and also for condoning the delay, the said provision override the provisions of the Limitation Act which is the general law governing the law of limitation. In those circumstances, Section 5 of the Limitation Act, which provides for condoning the delay, is not attracted.

In the case of an appeal against the said appellate order to the Tribunal, three months time is prescribed for preferring such appeal, whereas in Section 86 no provision is made for condoning the delay. In the absence of any express provision for condoning the delay in Section 86, Section 5 of the Limitation Act is attracted. Therefore, under the scheme of the Act when specific period of limitation is provided under the Act and also for condoning the delay, the discretion, which is vested in the Appellate Commissioner, has to be exercised within the four comers of the law. In other words, if there is a delay in preferring the first appeal u/s 85 and if the delay is upto the extent of three months, then the Appellate Commissioner is vested with the power to condone the delay if the cause shown is sufficient cause. In other words, even if the cause shown constitutes sufficient cause and if the delay is more than three months he has no jurisdiction to condone the delay. Therefore both the judgments relied on by the learned Counsel for the assessee has no application to the facts of this case. In the judgment of the Apex Court they were interpreting Section 5 which has no application to the facts of this case. In the judgment relied on of this Court in the case of Praxair India Pvt. Ltd. Vs. Commissioner of C. EX. and S.T., the question for consideration was whether the Tribunal was justified in dismissing the appeal on the ground of delay of 229 days on the ground that the cause shown is not the sufficient cause. That is not the position in this case. In this case the question is whether the Appellate Commissioner was justified in dismissing the appeal on the ground of limitation as the delay was more than three months after the expiry of three months prescribed for filing an appeal after receipt of copy of the order. Therefore, the order passed by both the authorities is legal and valid and does not call for any interference. The substantial question of law is answered in favour of the revenue and against the assessee. Accordingly, the appeal is dismissed.