Creative proposition by Revenue is ill-conceived and does not commend acceptance - where a limitation period is stipulated in terms of 'month', it connotes 30 days and not calendar month - Cost imposed: CESTAT
By TIOL News Service
NEW DELHI, APR 03, 2014: THE Joint Commissioner, Central Excise, Allahabad by an order dated 15.09.2011 confirmed service tax demand of Rs.45,77,043/-; appropriated Rs.80,000/- already deposited and levied late fee, interest and penalties. The appellant received the adjudication order passed by the primary authority on 8.10.2011 and filed the appeal before the Appellate Commissioner on 9.4.2012.
In an application for condonation of delay before the appellate authority, it was averred that the appeal could not be filed as the authorized representative of the appellant was out of station.
The appellate Commissioner, in his order observed that the reasons proffered by the assessee for the delay are not convincing and no sufficient cause was shown for the delay. Consequently, the appeal was rejected as barred by limitation.
Now, the appellant is before the CESTAT and submits -
++ The appeal was preferred within the further period of three months (beyond initial period of three months stipulated in Section 85(3) of the Finance Act, 1994);
++ The Appellate Commissioner has jurisdiction to condone the delay if the appeal was preferred within further period of three months (qua the proviso to Section 85(3) of the Act) and on satisfactory cause being shown and that though adequate justification was not pleaded by the assessee for seeking condonation, a liberal view should be adopted and if warranted the assessee should be put on terms and the delay condoned.
The Revenue representative submitted that there is no merit in the present appeal inasmuch as the appeal before Commissioner(A) was preferred beyond the further period of three months as well and, therefore, the appellate Commissioner had no discretion to condone the delay. That since the primary order was received by the assessee on 8.10.2011, the normal period for preferring an appeal would be 90 days from that date and further period of three months falling within the discretionary locus of the appellate Commissioner was 90 days beyond the initial period of 90 days i.e. 180 days in all from 8.10.2011. The Supreme Court decision in Hongo India (P) Ltd. (2009-TIOL-48-SC-CX-LB) is adverted to by the Revenue representative for this ‘creative proposition' ( in the words of the President, CESTAT ).
The Bench, after noting that the narrative set out in paras-12 and 19 of the Supreme Court's judgement in Hongo India (P) Ltd . cannot be understood as enunciating a principle that where a limitation period is stipulated in terms of "month", it connotes 30 days and not a calendar month,and that the contention of the Revenue representative is mis-conceived and does not commend acceptance, observed -
"10. In the light of the principles spelt out in M/s. Saket India Ltd. and Others Vs. M/s. India Securities Limited - AIR 1999SC 1090 , principles culled out after a detailed analysis of extant precedents, including provisions of the Limitation Act and the General Clauses Act, it is clear that in computing the period of limitation, the date on which an order to be appealed against is received must be excluded. It is the admitted case that 7th and 8th April, 2012 were public holidays (Saturday & Sunday). Since the appeal was filed on the next working day i.e. 9.4.2012 against an adjudication order received on 8.10.2011, the appeal before the Commissioner must be treated as having been filed within the further period of three months, i.e. within the discretionary ambit of the Commissioner (Appeals)."
Nonetheless the Bench found it prudent to dispel the notion harbored by the Revenue representative that the three months period should not be considered as calendar months but must be considered as 90 days.
The CESTAT referred to the Supreme Court decision in TamalLahiri - AIR 1978 Supreme Court 1811 where it is clarified that "six months" would mean six months in accordance with the British calendar and not 180 days; that a "month" as defined in Section 3(35) of the General Clauses Act is a calendar month and not 30 days.
The Bench further observed that while seeking condonation of delay the appellant had not provided clear and cogent grounds and, therefore, had failed to make out a case for condonation but nonetheless there areseveral decisions which postulate the principle that a liberal view must be taken while considering an application for condonation of delay and that even where no wholly satisfactory cause is pleaded, the appellate court is not denuded of the discretion to condone the delay but on the terms as to costs.
Holding that the appellant appeared to have an eminently arguable case on merits, to be presented before the Commissioner (Appeals), though the appeal was filed with delay not wholly explained satisfactorily, the Bench considered it appropriate to condone the delay but upon the condition that the appellant remits Rs.25,000/- towards costs to the credit of the Revenue within four weeks. And on the appellant producing proof of remittance of costs as ordered within the time stipulated, before the Commissioner (Appeals), the Commissioner (Appeals) shall proceed to adjudicate upon the merits of the appeal including any application for waiver of pre-deposit and dispose of the same in accordance with the law.
The appeal was disposed of as above.
Also see : 2014-TIOL-156-ITAT-AHM-SB & DDT 2322 dated 27.03.2014.
(See 2014-TIOL-500-CESTAT-DEL)
