2005 (9) TMI 95 - HC - Central Excise

Unauthorized Person's Notice Refusal Invalid; Assessee's Appeal Timely, Reassessed Under Central Excise Act.

The HC determined that the refusal of notice by an unauthorized person did not constitute valid service under Section 37C of the Central Excise Act, 1944. ... Service of adjudication order - whether the refusal could be treated to be the service within the meaning of Section 37C of the Central Excise Act, 1944 - authorised agent - HELD THAT:- The notice was admittedly sent through post and it has to be served to a person for whom it is intended or to an authorised agent, if any. Now, the question arises as to whether the said Shankar Sarkar could be treated to be as an authorised agent. In order to treat such person as an authorised agent, the onus shifted on the Department to show that he is an authorised agent, particularly when materials were produced before the Commissioner of Appeals and the learned Tribunal to show that he was not in service after 1st February, 2001 and the fact remains that the factory remained closed and stopped functioning, which information was already with the Department. Therefore, a refusal by such a person, who cannot be established to be an authorised agent, would not amount to a refusal by an authorised agent so as to come within the purview of Clause (a) of Section 37C. Thus, we answer the question in favour of the assessee and hold that the refusal, on the basis of which the Commissioner of Appeals had proceeded, could not be treated to be as acceptable service within the scope of Section 37C and the very fact that over phone the assessee was intimated and the assessee had received the adjudication order from the Department itself is indicative of the service on the date when the adjudication order was received by the assessee and as such, the limitation would start running from the date of receipt of the order of adjudication and the appeal having been filed within the period of 60 days, thereafter the appeal is well within time. Thus, the order passed by the Commissioner of Appeals and that by the learned Tribunal are hereby set aside. Let the appeal be decided and disposed of by the Commissioner of Appeals in accordance with law on merit as early as possible. This order is passed without prejudice to the rights and contentions of the parties. Issues:1. Interpretation of Section 37C of the Central Excise Act, 1944 regarding service of notice.2. Validity of the refusal as acceptable service within the scope of Section 37C.3. Timeliness of the appeal filed by the assessee.4. Setting aside the orders passed by the Commissioner of Appeals and the Tribunal.5. Directions for further proceedings and maintenance of the appeal.Analysis:1. The case involved a dispute regarding the service of an adjudication order on the assessee, whose undertaking had been closed. The main contention was whether the refusal of the notice by a person, who was not authorized to receive documents on behalf of the assessee, could be considered as valid service under Section 37C of the Central Excise Act, 1944.2. The appellant argued that the refusal should only be considered valid if made by the assessee or an authorized person. Evidence was presented to show that the person to whom the notice was addressed was not authorized, as he had been discharged from service. The refusal was not made by an authorized agent, and thus, it could not be accepted as valid service under Section 37C.3. The respondent contended that the issue was a finding of fact and not a substantial question of law for the court to intervene. It was argued that there was no conclusive evidence to prove that the person who refused the notice was not authorized by the assessee.4. The Court held that the refusal by the unauthorized person did not constitute valid service under Section 37C. The appeal filed by the assessee was considered timely as it was within 60 days of receiving the adjudication order directly from the Department. The orders passed by the Commissioner of Appeals and the Tribunal were set aside.5. The Court directed the Commissioner of Appeals to decide the appeal on its merits promptly. The assessee was required to deposit security unless exempted by the Commissioner. The Court clarified that the direction did not mandate immediate security deposit, and the application under Section 35F would be considered before entertaining the appeal.6. All parties were instructed to act based on a signed copy of the order. The judgment was passed without prejudice to the rights and contentions of the parties, ensuring a fair and just resolution of the matter.