2025 (9) TMI 815 - AT - Service Tax

Appeal dismissed as time-barred under Section 85 Finance Act 1994; no power to condone delay beyond 30 days

The CESTAT (Chandigarh) upheld the Commissioner (Appeals) order rejecting the appellant's appeal as time-barred under Section 85 of the Finance Act, 1994. ... Rejection of appeal of the appellant on limitation - appeal was filed beyond the time limit prescribed under Section 85 of the Finance Act, 1994 - short payment of service tax - HELD THAT:- It is found that admittedly the Order-in- Original dated 10.12.2021 was received by the appellant on 16.12.2021 and as per Section 85 of the Act, the appeal before the Commissioner (Appeals) is to be filed within a period of 60 days plus further extension of 30 days. Further, it is found that in this case the appeal was filed on 05.09.2022 before the Commissioner (Appeals) and the learned Commissioner (Appeals) vide the impugned order, has rejected the appeal being barred by time. This issue has been settled by the Hon’ble Supreme Court in the case of Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT] wherein the Hon’ble Supreme Court, after considering the provisions of Section 35 of the Central Excise Act, 1944, has dismissed the appeal of the assessee and held that 'there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period.' There are no infirmity in the impugned order, accordingly, the same is upheld by dismissing the appeal of the appellant being time barred before the learned Commissioner (Appeals) as the same was filed beyond the stipulated period of two/three months as applicable and as mandated by law. Appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether an appeal filed before the Commissioner (Appeals) beyond the period of 60 days plus a further condonable period of 30 days under Section 85 of the Finance Act, 1994 can be entertained by the Commissioner (Appeals) or the Tribunal. 2. Whether the Tribunal has power to condone delay beyond the statutory maximum period expressly prescribed by Section 85 of the Finance Act, 1994 by invoking provisions of the Limitation Act or otherwise. 3. Whether the Commissioner (Appeals) erred in rejecting an appeal as time barred without adjudicating merits where explanation for delay asserted bona fide belief and notice of order by attachment of bank account was placed on record. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Statutory limitation for filing appeal under Section 85 of the Finance Act, 1994 Legal framework: Section 85 prescribes that an appeal to the Commissioner (Appeals) must be filed within 60 days from date of communication of the order and that the Commissioner (Appeals) may, if satisfied that the appellant was prevented by sufficient cause, allow the appeal to be presented within a further period of 30 days. The statutory scheme therefore contemplates a maximum period of 90 days for filing an appeal before the Commissioner (Appeals). Precedent treatment: The Court follows the principle enunciated by the Supreme Court in Singh Enterprises, which interpreted parallel provisions in the Central Excise Act to hold that the appellate authority's power to condone delay is confined to the period expressly provided by the statute and that Section 5 of the Limitation Act cannot be invoked to extend that period beyond the statutory maximum. Interpretation and reasoning: The Tribunal observed that the Order-in-Original dated 10.12.2021 was communicated on 16.12.2021; hence, the statutory period for filing the appeal expired on 16.02.2022 (60 days) and the maximum extendable date under Section 85 was 16.03.2022 (30 days extension) (the impugned order applied specific calendar computation producing 28.04.2022/28.05.2022 under its facts). The appeal was filed on 05.09.2022, beyond the statutory maximum. Applying the ratio of Singh Enterprises, the Tribunal held there is no jurisdiction in the Commissioner (Appeals) (or in the Tribunal) to condone delay beyond the express outer limit provided by the statute; therefore the appeal was rightly rejected as time barred. Ratio vs. Obiter: The holding that the statutory maximum period under Section 85 is conclusive and not extendable by the Commissioner (Appeals) or the Tribunal is ratio; reliance on Singh Enterprises is treated as binding precedent for this proposition. Conclusion: The appeal filed after expiry of 60 days plus the condonable 30 days under Section 85 could not be entertained; the Commissioner (Appeals) correctly rejected the appeal as barred by limitation. Issue 2 - Power of Tribunal to condone delay beyond statutory period and the applicability of the Limitation Act Legal framework: The enabling provision (Section 85) contains an express proviso prescribing the period within which condonation may be granted; where a statute prescribes a limited period and an express power of condonation for a specified further period, the general provisions of the Limitation Act (Section 5) are excluded to the extent they would permit further extension. Precedent treatment: Singh Enterprises is followed and applied. That decision held that the first proviso limits condonation to the specified further period and excludes the operation of Section 5 of the Limitation Act for further extension, thereby precluding the Tribunal from condoning beyond statutory limits. Interpretation and reasoning: The Tribunal reasoned that permitting invocation of the Limitation Act or permitting the Tribunal to condone beyond the statutory maximum would render the statutory limitation illusory and defeat the legislative intent to confine condonation to a defined period. The Tribunal noted that the power to condone is vested in the appointed appellate authority up to the maximum prescribed period only; neither the Commissioner (Appeals) nor the Tribunal can extend the outer limit set by the statute. Ratio vs. Obiter: The conclusion that the Limitation Act cannot be used to extend the statutory condonation period is ratio and determinative for appeals under Section 85. Conclusion: The Tribunal lacks jurisdiction to condone delay beyond the statutory maximum; the Limitation Act's Section 5 is excluded for the purpose of extending time beyond that maximum. Issue 3 - Adequacy of explanation for delay and whether merits ought to have been considered despite delay Legal framework: When an appeal is time barred, the appellate authority may consider an application for condonation if sufficient cause is shown; sufficiency of cause is fact-sensitive and no rigid formula exists, but the statutory outer limit remains binding. Precedent treatment: The Tribunal relied on the guidance in Singh Enterprises concerning assessment of 'sufficient cause' and the limits of condonation power, and distinguished cases where peculiar facts justified condonation within the statutory limits. Interpretation and reasoning: The appellant contended bona fide belief of non-liability and asserted that knowledge of the Order-in-Original arose when the department attached the bank account via a letter dated 21.06.2021. The Tribunal observed that the Order-in-Original was communicated on 16.12.2021 and the appeal was filed on 05.09.2022, which exceeds the maximum condonable period. Given the statutory bar, the Tribunal held that the Commissioner (Appeals) was correct to reject the appeal without going into merits because the authority had no jurisdiction to admit the appeal after the prescribed outer limit. The Tribunal did not undertake merit adjudication because jurisdictional limitation precluded it. Ratio vs. Obiter: The procedural holding that a time-barred appeal cannot be admitted regardless of asserted sufficient cause once the statutory outer limit is exceeded is ratio; discussion of the appellant's particular factual assertions (bona fide belief, bank attachment) is incidental and therefore obiter to the extent it does not affect the jurisdictional conclusion. Conclusion: Explanations offered for delay, however characterized, could not be entertained because the appeal was filed beyond the statutory maximum period; the Commissioner (Appeals) rightly rejected the appeal on limitation without examining merits. Cross-reference Issues 1-3 are interlinked: the jurisdictional limitation in Issue 1 and the non-applicability of the Limitation Act in Issue 2 render the sufficiency of cause analysis in Issue 3 moot once the appeal is shown to have been filed beyond the statutory outer limit; accordingly the Tribunal upheld the limitation-based dismissal without addressing merits.