2015 (8) TMI 1074 - HC - Service Tax

Appeal Time Limit Upheld; Penalties Imposed for Tax Evasion

The Full Bench held that the appeal was barred by limitation as the period for filing under Section 35 of the Central Excise Act, 1944, could not be ... Condonation of delay - delay in appeal before the Commissioner (appeals) - whether the case would fall under any of the clarifications made in Answer no.3 by larger bench in the case of Panoli Intermediate (India) Pvt. Ltd. [2015 (7) TMI 303 - GUJARAT HIGH COURT] wherein court has held that in specified circumstances, only, the delay can be condoned - Levy of penalty u/s 78 - Held that:- Unless M/s.Dosti Fabricators was raided and relevant documents were found out by the respondent, there would be non-payment of huge of service tax, which the petitioners are liable to pay. Therefore, in our opinion, the case is covered u/s.78 of the Finance Act. - Therefore, the case would not fall under any of the clarifications made in Answer no.3 by larger bench warranting condonation of delay in filing the appeal - Decided against the assessee. Issues Involved:1. Condonation of delay in filing an appeal under Section 35 of the Central Excise Act, 1944.2. Maintainability of a writ petition under Article 226 of the Constitution of India for condoning delay.3. Jurisdiction and exercise of power by the adjudicating authority in imposing penalties under Section 78 of the Finance Act, 1994.Detailed Analysis:1. Condonation of Delay in Filing an Appeal:The petitioners sought to challenge the orders passed by the Appellate Tribunal, Commissioner (Appeals), and Joint Commissioner of Central Excise, which refused to condone the delay in filing the appeal. The Full Bench addressed whether the period of limitation for filing an appeal under Section 35 of the Central Excise Act, 1944, could be extended beyond the prescribed 90 days. The Full Bench concluded that the limitation period could not be extended beyond 30 days as provided by the proviso, nor could an appeal be filed beyond 90 days. Consequently, the petitioners' appeal was barred by limitation, and the delay could not be condoned.2. Maintainability of Writ Petition under Article 226:The petitioners also sought relief under Article 226 of the Constitution of India to condone the delay in filing the appeal. The Full Bench held that a writ petition under Article 226 would not lie for the purpose of condoning the delay in filing an appeal. This decision was based on the principle that statutory remedies and limitations should be respected, and extraordinary jurisdiction under Article 226 should not be invoked to bypass statutory limitations.3. Jurisdiction and Exercise of Power by Adjudicating Authority:The petitioners argued that the adjudicating authority exceeded its jurisdiction by imposing penalties under Section 78 of the Finance Act, 1994, and that the case did not involve fraud, collusion, or willful misstatement. The petitioners contended that they had paid the service tax and that the authority had not properly considered their case. The Full Bench clarified that a writ petition under Article 226 could be entertained to challenge an order passed by the original adjudicating authority if the authority acted without jurisdiction, in excess of jurisdiction, or in violation of principles of natural justice.In this case, the Division Bench examined whether the petitioners' case fell within the parameters prescribed by the Full Bench for entertaining a writ petition. The Division Bench found that the petitioners had suppressed facts and failed to disclose full information regarding the payment of service tax. The adjudicating authority had acted within its jurisdiction and had provided sufficient opportunity for the petitioners to present their case. The authority's decision to impose penalties under Section 78 was based on the petitioners' failure to pay service tax and the suppression of facts.The Division Bench concluded that the petitioners' case did not meet the criteria for invoking Article 226 to challenge the adjudicating authority's order. The petitioners had not established that the authority acted without jurisdiction or in excess of jurisdiction. Therefore, the petition was dismissed, and the notice was discharged.