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Mukesh R. Shah , J.—Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad [hereinafter referred to as "Tribunal"] by which the learned Tribunal has refused to condone the huge delay of 541 days in preferring the respective appeals against the orders passed by the learned Commissioner (Appeals), the respective appellants have preferred the present tax appeals with the following proposed questions of law. "(a) Whether the Hon''ble CESTAT erred in dismissing the Appellant''s application for condonation of delay in light of the fact that the Appellant was not responsible in any manner for the delay in filing the appeal and there were sufficient grounds on record for permitting condonation of delay?
(b) Whether the Appellant is individually eligible for exemption under exemption notification dated 01.03.2005 which exempts taxable services of aggregate value not exceeding Rs. 8 lakhs in any financial year from the whole of service tax leviable thereon under Section 66 of the Finance Act, 1994?
(c) Whether the ''service of renting of immovable property'' is a divisible service for the purpose of determining service tax liability of a group of individuals who have rented out property as the co-owners of such property?
(d) Whether the Appellant is liable for non-payment of service tax and consequent violations of Sections 70, 76 and 77 of the Finance Act, 1994?"
That a lease deed was executed between the service providers [respective appellants herein] and HDFC Bank whereby the property owned by the service providers was leased to HDFC Bank. That a show-cause notice was served upon the service providers by the office of Assistant Commissioner, Division-El, calling upon the service providers to show cause as to why service tax of Rs. 3,64,353/- for the period from 01.08.2007 to 30.09.2008 should not be recovered from them along with the interest and penalty under sections 70, 76 and 78 of the Finance Act, 1994. That the Deputy Commissioner of Service Tax passed an order on 04.10.2011 holding that the service providers were providing indivisible service of renting of immovable properties jointly and collectively as "Association of individuals" and were, therefore, liable to pay service tax of Rs. 44,917/- each [collectively Rs. 3,51,340/-] and a penalty of the like amount in addition to a penalty of Rs. 6,000/- and Rs. 200/- under sections 70, 76, 78 of the Finance Act, 1994. 1.1 That feeling aggrieved and dissatisfied with the order passed by the first adjudicating authority, the service providers - respective appellants herein preferred appeals before the Commissioner (Appeals-IV), Central Excise, Ahmedabad and by order dated 25.01.2012, the Commissioner (Appeals) upheld the order passed by the first adjudicating authority.
1.2 That feeling aggrieved and dissatisfied with the order passed by the Commissioner (Appeals), the respective appellants preferred appeals before the learned Tribunal. There was a delay of 541 days in preferring the respective appeals before the learned Tribunal and therefore, the respective appellants submitted the separate applications requesting to condone the delay. That additional affidavits were filed to explain the delay. However, the learned Tribunal was not satisfied with the explanation submitted in support of the prayer to condone the delay and as such observed that the affidavits of other persons do not inspire any confidence, by impugned common judgment and order the learned Tribunal has refused to condone the delay of 541 days in preferring the respective appeals and has rejected the respective applications for condonation of delay and consequently the respective appeals as well as the applications.
1.3 Feeling aggrieved and dissatisfied with the impugned common order passed by the learned Tribunal in refusing to condone the delay of 541 days in preferring the respective appeals against the orders passed by the Commissioner (Appeals), respective appellants have preferred the present tax appeals with the aforesaid proposed questions of law.
Shri Kunal Nanavati, learned advocate appearing on behalf of the respective appellants has vehemently submitted that the learned Tribunal has materially erred in not condoning the delay. It is submitted that the learned Tribunal ought to have appreciated that as such there was no other mala fide intention on the part of the respective appellants in not preferring the appeals within the period of limitation. It is further submitted that the learned Tribunal has materially erred in not properly appreciating the further affidavits filed by the appellants along with the affidavits of one Shri Rakesh Thakor and Shri Parvez Parwala explaining elaborately the reason for the delay. It is submitted that as such the respective appellants did hand over the papers to their Chartered Accountant to prefer the appeals. However, due to the negligence on the part of the office of the Chartered Accountant, the appeals were not preferred within the period of limitation and thereafter when on inquiry it was found that the said Chartered Accountant i.e. M/s. Divyesh H. Shah & Co. did not file the appeals, the appellants took back the papers/files and handed over the same to another Chartered Accountant who filed the appeals subsequently. It is submitted that therefore there was a negligence on the part of the office of the Chartered Accountant M/s. Divyesh H. Shah & Co. and for the negligence on the part of the Chartered Accountant, the appellants may not be penalized/punished. By making above submissions and relying upon the decisions of the Hon''ble Supreme Court in the case of Collector, Land Acquisition, Anantnag and Another Vs. Mst. Katiji and Others, as well as one order passed by the Division Bench of this Court in Tax Appeal No. 853/2013 with Tax Appeal No. 854/2013, it is requested to admit/allow the present appeals and thereafter quash and set aside the order passed by the learned Tribunal by condoning the delay and direct the learned Tribunal to decide the appeals in accordance with law and on merits.
2.1 Shri Nanavati, learned advocate appearing on behalf of the respective appellants has requested that if this Court is not inclined to admit the present appeals, in that case, it may be suitably observed that this Court has not entered into the merits of the case at all and has not decided the issues with respect to the liability of the appellants to pay the service tax on merits and the same may be kept open to be considered in subsequent assessment orders.
Heard Shri Kunal Nanavati, learned advocate appearing on behalf of the respective appellants at length.
We have gone through the impugned common order passed by the learned Tribunal refusing to condone the huge delay of 541 days. We have also gone through and considered the original application submitted by the appellants requesting to condone the delay as well as the subsequent further affidavits filed by the appellants and the affidavits of Shri Rakesh Thakor and Shri Parvez Parwala explaining the delay.
3.1 At the outset it is required to be noted that the learned Tribunal has considered in detail the application submitted by the appellants to condone the delay and the grounds set out in the said application as well as further affidavit of the appellants as well as affidavits of Shri Rakesh Thakor and Shri Parvez Parwala and thereafter has refused to condone the delay by observing in para 4 as under:
"4. On careful consideration of the submissions made by both sides, we find that the condonation application of all the applicants are identical and it states that the applicant was under impression that appeals have been filed as per the discussion with their Chartered Accountant. It is also submitted that the Chartered Accountant who were handling their matters had erred and subsequently, appellant took back the papers and handed the responsibility to another Chartered Accountant who has now filed the appeal. It is also the submission that a clerk working with the Chartered Accountant has filed an affidavit that there was a delay on his part. We find that such affidavit filed by the appellant as well as a clerk of the second Chartered Accountant appointed by the appellant have not given any proper reasoning except that their peon forgot to hand over appeals papers. The appellants also have not justified the delay in a manner to instill confidence and condone the delay. There is nothing on record to indicate that the appellants had acted in due diligence in pursuing with their first Chartered Accountant and subsequently the second Chartered Accountant. It is also not forthcoming from the records as to when all the papers were collected back from the first Chartered Accountant and handed over to second Chartered Accountant. In view of the foregoing, since the affidavits of the appellants as well as the clerk of Chartered Account, peon of the Chartered Accountant do not instill any confidence, we dismiss the applications for condonation of delay as devoid of merits. Consequently, having dismissed the application for condonation of delay, stay petitions and appeals also get dismissed."
3.2 Considering the above and on due consideration of the documents on record, the learned Tribunal has refused to condone the delay by observing that there are no justifiable reasons shown to condone the huge delay of 541 days. Considering the impugned order passed by the learned Tribunal, we are of the opinion that learned Tribunal has exercised the discretion judiciously and after due application of mind.
3.3 Even we ourselves have considered the prayer of the appellants to condone the huge delay of 541 days on merits. For that we have gone through and considered the original application submitted by the appellants to condone the delay as well as subsequent affidavits and the subsequent further affidavits of the appellants as well as the affidavits of Shri Rakesh Thakor and Shri Parvez Parwala.
Considering the aforesaid it appears that there are contradictory versions and the further affidavits of Shri Rakesh Thakor and Shri Parvez Parwala do not instill any confidence. It is required to be noted that when initially the appellants submitted the application for condonation of delay, the appellants stated as under:
"On 27.01.2012, I received the order of Commissioner (Appeal-IV), Central Excise, Ahmedabad in my case for the period 01.08.2007 to 30.09.2008. Being aggrieved by the said order, I requested my auditors M/s. Divyesh H. Shah & Co., Chartered Accountants, to prefer an appeal to the Hon''ble Appellate Tribunal and they undertook to do the needful soon. However, the appeal papers submitted to one staff member of the Chartered Accountant were mixed up with the other papers in his office and the appeal was left unfiled.
Under the impression that the appeal was filed, and on my discussion with the Chartered Accountant regarding the status of appeal few days back, he searched for my file and informed me that the signed papers for filing appeal were mistakenly filed in some other client''s file and the matter was thus forgotten completely. On becoming aware of this negligence committed by M/s. Divyesh H. Shah & Co., Chartered Accountants, I immediately appointed another consultant, CA Miss Purvi G. Trivedi from M/s. Shah Thakkar & Co., Chartered Accountants for handling my appeal matter."
However, subsequently, when the appellants filed the further affidavits, it was supported by the affidavits of Shri Rakesh Thakor and Shri Parvez Parwala with altogether a different ground/story. In the further affidavits explaining the delay, the appellant Ghanshyam Vaghela came out with a following case.
"That my erstwhile consultant M/s. Divyesh H Shah & Co., Chartered Accountant, was out of town on an official tour when I had handed over the appeal papers to one of his staff members''. His peon had then handed over those papers to one of the staff members'' Mr. Rakesh Thakor, employed with Mr. Ingit Modi, Chartered Accountant, who is a professional contact and with whom assistance in professional matters was sought by Mr. Divyesh Shah as they have workplace in the same office complex.
However, due to sheer negligence and oversight, Rakesh Thakor forgot to handover the appeal papers to Mr. Parvez R. Parwala working with Mr. Ingit Modi and assisting him in tax & appeal matters."
That along with the said additional affidavits, the appellants have produced the affidavit of one Shri Parvez Parwala working with altogether another Chartered Accountant i.e. Shri Ingit Modi, Chartered Accountant as well as the affidavit of one Shri Rakesh Thakor who was a clerk working with the aforesaid Shri Parvez Parwala. On considering the further affidavits/affidavits of the aforesaid two persons, it appears that the appellant has come out with altogether a different story of handing over the papers to Shri Rakesh Thakor, a clerk of Shri Parwala of mis. Ingit Modi, Chartered Accountant. It is required to be noted that as such the aforesaid can be said to be an afterthought and altogether a new story/grounds. Considering the aforesaid facts and circumstances, we are in complete agreement with the view taken by the learned Tribunal that the affidavits filed by the Shri Rakesh Thakor and Shri Parvez Parwala do not inspire any confidence. The learned Tribunal has rightly observed that the respective appellants have failed to make out a sufficient ground to condone the huge delay of 541 days. It appears that the respective appellants were totally negligent. Under the circumstances, the learned Tribunal has rightly refused to condone the huge delay of 541 days in preferring the appeals.
At this stage the decisions of the Hon''ble Supreme Court in the case of Office of The Chief Post Master General and Others Vs. Living Media India Ltd. and Another, as well as in the case of Lanka Venkateswarlu (D) by L.Rs. Vs. State of A.P. and Others, are required to be referred to.
In the case of Living Media India Ltd. (Supra), the Hon''ble Supreme Court in absence of plausible and acceptable explanation, refused to condone the delay.
Identical question came to be considered by the Hon''ble Supreme Court in the case of Lanka Venkateswarlu (supra). In the said decision, Hon''ble Supreme Court considered the earlier decision in the case of N. Balakrishnan Vs. M. Krishnamurthy, , which has been relied upon by the learned Assistant Government Pleaders. While considering the question of condonation of delay under Section 5 of the Limitation Act in filing the appeal and considering the earlier various decisions of the Hon''ble Supreme Court it is held and observed by the Hon''ble Supreme Court that while considering the applications for condonation of delay under Section 5 of the Limitation Act, the Courts do not enjoy unlimited and unbridled discretionary powers. All discretionary powers, especially judicial powers, have to be exercised within reasonable bounds, known to the law. It is further observed that such concepts such as "liberal approach", "justice oriented approach", "substantial justice" cannot be employed to jettison the substantial law of limitation especially, in cases where the Court concludes that there is no justification for the delay. In the said decision before the Hon''ble Supreme Court, the delay was sought to be condoned, which was caused by the inefficiency and ineptitude of the Government Pleaders and the Hon''ble Supreme Court observing the above, refused to condone the delay.
3.4 Now, so far as the reliance placed upon the decision of the Hon''ble Supreme Court in the case of Mst. Katiji (Supra) is concerned, it is required to be noted that after considering the aforesaid decision, the Hon''ble Supreme Court in the subsequent decision in the case of Post Master General {Supra) has refused to condone the delay. Similarly, on facts, the decision of this Court in Tax Appeal No. 853/2013 would not be of any assistance to the appellants. We are in complete agreement with the view taken by the learned Tribunal in refusing to condone the delay. Once the appeal is required to be dismissed on the ground of delay, the Court is not required to go into the merits of the case and other questions raised in the present appeals. Under the circumstances, we refuse to enter into the merits of the case and/or observing anything on merits with respect to other questions raised as the same are on merits.
In view of the above and for the reasons stated above, as no substantial question of law arise with respect to the order passed by the learned Tribunal refusing to condone the delay as on facts the learned Tribunal has refused to condone the huge delay of 541 days. Under the circumstances, all these tax appeals deserve to be dismissed and are, accordingly, dismissed.
Consequently, the respective Civil Application Nos. 332/2014 to 339/2014 also deserve to be dismissed and are, accordingly, dismissed.