2025 (8) TMI 1141 - AT - Service Tax

Delay of 335 days condoned where ROM order service lacked Section 37C proof; limitation runs from ROM receipt

Vishal Shrivastava Contractor Versus Commissioner of Central Excise & Central Goods, Service Tax, Jabalpur

Vishal Shrivastava Contractor Versus Commissioner of Central Excise & Central Goods, Service Tax, Jabalpur - TMI ISSUES PRESENTED AND CONSIDERED 1. Whether the delay of 335 days in filing the appeal should be condoned. 2. Whether service of the Rectification/Review/Order-in-Review (ROM) dated 14.09.2023 upon the appellant was proved so as to start the limitation period from an earlier date. 3. The correct date from which limitation for filing the appeal is to be computed - original order receipt or receipt of the ROM order. 4. Whether the appellant exercised sufficient due diligence and whether any mala fides or negligence has been proved by the department. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Whether the delay of 335 days in filing the appeal should be condoned. Legal framework: The statutory limitation for filing the appeal is governed by the Finance Act, 1994 regime and the provisions made thereunder (including requirement of service under Section 37C). Courts/tribunals have jurisdiction to condone delay if sufficient cause is shown. Precedent treatment: The Court relies on earlier authority holding that non-compliance with statutory service formalities can affect when limitation begins to run and that a party acting promptly after receipt of a validly served order demonstrates sufficient cause for condonation. Interpretation and reasoning: The Court found a substantial delay in filing the appeal from the date of the impugned order. However, on facts the appellant received the original Order-in-Appeal on 02.09.2023, immediately sought rectification on 12.09.2023, and the ROM order is shown to have been received on 29.08.2024 (per appellant affidavit and supporting letter). After receipt of the ROM order the appellant paid the pre-deposit on 25.09.2024 and filed the appeal on 23.10.2024 - within the prescribed period from receipt of the ROM order. The department alleged earlier delivery of the ROM order on 25.09.2023 but adduced no proof of service. Given absence of evidence of earlier service and the appellant's prompt acts, the Court treated the delay as explainable and condonable. Ratio vs. Obiter: Ratio - delay condoned where petitioner acted promptly upon receipt of the ROM order and no proof of earlier service was produced by the department. Obiter - general observations on vigilance and zeal of appellant reinforce the ratio but are ancillary. Conclusion: The Court condoned the delay and allowed the application for condonation of delay. Issue 2 - Whether service of the ROM order was proved so as to start limitation earlier. Legal framework: Section 37C(1)(a) of the Finance Act, 1994 prescribes mandatory modes and person-specific tender of service (registered post with AD or speed post) and requires tender on the person concerned or his authorized agent; effective service is a condition precedent to the running of limitation. Precedent treatment: The Court relies on the principle, drawn from higher authority, that service must be strictly in accordance with the statute and must be tendered to the concerned person or authorized agent - service on any other person is ineffective and cannot start limitation. Interpretation and reasoning: The department asserted earlier delivery of the ROM order (25.09.2023) but produced no documentary proof of delivery to the appellant or its authorized agent. The appellant produced an affidavit and a departmental letter dated 'NIL' (No. 602/ST/APPL/BPL/2023) evidencing that a copy of the ROM order was supplied only after the appellant's request dated 29.08.2024. The Court found the department's contention unsupported; in absence of proof of statutory service, the ROM order cannot be treated as earlier served. Ratio vs. Obiter: Ratio - where statutory mode and person-specific service are not proved, the date of alleged earlier delivery cannot be treated as starting point for limitation. Obiter - the Court's reliance on the statutory text reinforces strict compliance requirements. Conclusion: Service of the ROM order on any date prior to 29.08.2024 was not proved; therefore limitation could not be computed from any alleged earlier service. Issue 3 - The correct date for commencement of limitation: original order receipt vs. ROM order receipt. Legal framework: Limitation rules applicable to appeals under the Act and the settled principle that when an original order is rectified/modified by a ROM/rectification order, the limitation for appealing the final adjudicatory position runs from the date of receipt of the rectification/ROM order. Precedent treatment: The Court expressly followed an authority holding that the limitation period for filing an appeal begins from the date of receipt of the rectification order and not from the original assessment/order date. Interpretation and reasoning: The appellant received the original Order-in-Appeal on 02.09.2023 and promptly applied for rectification on 12.09.2023; the ROM order was received (per appellant evidence) on 29.08.2024. The appellant took steps (pre-deposit) within one month of that receipt and filed the appeal within time from that date. In view of the binding principle that limitation runs from the date of ROM/rectification receipt, the appeal is within time measured from 29.08.2024. Ratio vs. Obiter: Ratio - the limitation for filing the appeal runs from the date of receipt of the ROM/rectification order; earlier receipt of the original order does not commence the limitation where a rectification/ROM order is issued and properly received later. Obiter - none significant beyond application to facts. Conclusion: Limitation for the appeal was correctly reckoned from the date of receipt of the ROM order (29.08.2024), rendering the appeal timely when filed on 23.10.2024. Issue 4 - Whether the appellant exercised sufficient due diligence and whether mala fides/ negligence were proved. Legal framework: Condonation of delay requires demonstration of sufficient cause, which can include promptness upon receipt of relevant orders and absence of negligence or mala fide conduct. Precedent treatment: Decisions cited emphasize that prompt action following receipt and lack of contrary evidence of negligence support allowance of condonation applications. Interpretation and reasoning: The appellant filed a rectification application promptly (12.09.2023) after receiving the original order (02.09.2023), sought a copy of the ROM order by letter on 29.08.2024, received the ROM copy thereafter, made the pre-deposit on 25.09.2024 within one month, and filed the appeal on 23.10.2024. The department produced no evidence to show negligence or mala fide conduct by the appellant. These facts indicated vigilance and due diligence by the appellant. Ratio vs. Obiter: Ratio - absence of evidence of negligence/mala fide conduct and demonstrable promptness constitute sufficient cause for condonation. Obiter - observations on complainant's general conduct not central to decision. Conclusion: The appellant exercised sufficient due diligence; no negligence or mala fides were proved by the department, supporting allowance of the condonation application. Overall Conclusion The Court, applying the statutory requirements for service under Section 37C, following authorities on commencement of limitation from receipt of ROM/rectification orders, and on the facts showing prompt action by the appellant and lack of proof of earlier service by the department, concluded that the delay of 335 days is satisfactorily explained and condoned; the condonation application is allowed and the appeal is to be listed for hearing.