2025 (5) TMI 1908 - AT - Central Excise

Appeal wrongly dismissed as time-barred when limitation period under Section 35(1) starts only upon effective communication

M/s. Rane (Madras) Ltd. Versus Commissioner of GST and Central Excise, Chennai South Commissionerate

CESTAT Chennai allowed the appeal by remand after finding that the Commissioner Appeals erroneously dismissed the appeal as time-barred. The Commissioner ... Dismissal of the appeal preferred by the Appellant as an appeal filed beyond the statutory time limit prescribed in statute - HELD THAT:- Indisputably, the fact is that the appeal has been dismissed by the Commissioner Appeals on a finding that “ on the other hand, from the copy of the impugned order it is clear that the same has been dispatched on 23.07.2015. This being so, the claim of the Appellant that the date of receipt of the impugned order is 18.05.2016 is a misstated claim and therefore lacks merit.” The very same issue had come up for consideration by the Hon’ble Chhatisgarh High Court in a tax appeal in the case M/s. Vijay Pratap vs. CCE & ST, Chhattisgarh, [2025 (3) TMI 963 - CHHATTISGARH HIGH COURT] Chattisgarh High Court, where after framing a substantial question of law as ““Whether the Customs, Excise & Service Tax Appellate Tribunal is justified in dismissing the appeal preferred by the appellant and affirming the order of Commissioner of Central Excise (Appeals) by holding that Commissioner of Central Excise (Appeals) has rightly dismissed the appeal of the appellant being barred by limitation, by recording a finding which is perverse to the record?”, the Judgement was rendered. It is found from the facts of the appeal at hand, the appellate authority in his findings reproduced supra that from the copy of the impugned order it is clear that the same has been dispatched on 23.07.2015, has thus merely relied on the date of despatch and as such, there is no evidence on record to demonstrate the proof of delivery of the subject order and that the appellant was communicated with the adjudication order passed. Conclusion - The limitation period for filing an appeal under Section 35(1) of the Central Excise Act begins only upon effective communication of the order to the aggrieved party. The matter is remitted to the Commissioner (Appeals) for adjudicating the appeal on its merits in accordance with law and adhering to the principles of natural justice - Appeal allowed by way of remand. The core legal question considered by the Tribunal is whether the dismissal of the appeal on the ground of being time barred, without adjudicating the merits, is tenable in light of the appellant's claim regarding the date of receipt of the impugned Order-in-Original. The issue revolves around the proper interpretation and application of limitation provisions under the Central Excise Act, 1944, specifically Section 35, and the manner and proof of service of orders as mandated by Section 37C of the Act.Regarding the limitation for filing appeals, the Tribunal examined the statutory framework under Section 35(1) of the Central Excise Act, which prescribes a 60-day period from the date of communication of the order to file an appeal before the Commissioner (Appeals), with an additional condonable period of 30 days. The Tribunal emphasized that the limitation period commences only upon effective communication of the order to the aggrieved party. The power to condone delay is strictly confined to a maximum of 30 days beyond the initial 60-day period, totaling 90 days, beyond which no further extension is permissible.The Tribunal further analyzed the provisions of Section 37C of the Central Excise Act, which prescribes the manner of service of decisions, orders, summons, or notices. Service must be effected by tendering the document or sending it by registered post with acknowledgment due, speed post with proof of delivery, or by courier approved by the Central Board of Excise and Customs to the intended person or their authorized agent. If such service is not possible, alternative modes such as affixing a copy at the business premises or notice board are prescribed. Crucially, under subsection (2), the decision or order is deemed served only on the date it is tendered or delivered with proof, underscoring the necessity of proof of delivery for the limitation clock to start running.The Tribunal relied heavily on a precedent from the Chhattisgarh High Court, which dealt with a similar issue concerning the proof of service and the commencement of limitation. That Court held that the authorities must ensure meaningful and realistic service to the affected party so that they are not only aware of the order but also enabled to initiate appropriate action within the prescribed time. The Supreme Court's jurisprudence was cited, underscoring the principle that statutory acts must be performed strictly in the prescribed manner or not at all, reinforcing the necessity of proof of delivery under Section 37C.Applying these principles to the facts, the Tribunal noted that the impugned order was dispatched by the department on 23.07.2015, but there was no evidence on record to demonstrate that the appellant actually received the order on that date. The appellant consistently claimed non-receipt and only obtained a copy on 18.05.2016, after repeated requests. The Tribunal observed that mere dispatch does not equate to effective communication unless supported by proof of delivery as mandated by law. Therefore, the limitation period for filing the appeal could not be held to have commenced from the date of dispatch but rather from the actual date of communication, which was effectively established as 18.05.2016.The Tribunal rejected the appellate authority's reliance solely on the dispatch date without proof of delivery and held that the dismissal of the appeal on the ground of limitation was legally erroneous. The Tribunal distinguished the present case from the decisions cited by the respondent, where proof of delivery was available and the limitation period was rightly computed from the date of receipt. The Tribunal emphasized that the appellant's right to appeal must be preserved where procedural requirements for service have not been complied with, to prevent miscarriage of justice.Consequently, the Tribunal set aside the impugned order dismissing the appeal as time barred and remitted the matter to the Commissioner (Appeals) for fresh adjudication on merits, directing expeditious disposal within two months due to the aged nature of the dispute. This remand was ordered to ensure adherence to principles of natural justice and proper adjudication of the substantive issues raised by the appellant.In sum, the Tribunal established the following core principles:The limitation period for filing an appeal under Section 35(1) of the Central Excise Act begins only upon effective communication of the order to the aggrieved party.Section 37C mandates service of orders by modes that provide proof of delivery; mere dispatch without proof of receipt is insufficient to trigger limitation.Authorities must take all reasonable steps to ensure meaningful service so that the affected party can exercise their right to appeal within the prescribed time.Dismissal of an appeal purely on the basis of limitation without proof of proper service amounts to a denial of natural justice and is liable to be set aside.Where proof of delivery is not on record, the date of actual receipt by the appellant is to be considered for computing limitation.The Tribunal's final determination was to allow the appeal by setting aside the dismissal order and remanding the matter for adjudication on merits, thereby vindicating the appellant's right to be heard and ensuring compliance with statutory procedural safeguards.