By TIOL News Service

NAGPUR, MAR 13, 2018: THE appellant has challenged the order of the CESTAT refusing to condone delay of about 624 days in filing an appeal against the order in original.

It is contended that Section 37C of the CEA, 1944 prescribes the stages through which service to the other side must be attempted and pasting on notice board of the authority issuing the order is last resort. It is submitted that in present matter after initiating steps under Section 37C(1)(a), directly step under Section 37C(1)(c) has been resorted to and thus there was no recourse to procedure prescribed under Section 37C(1)(b). Inasmuch as the service of the order-in-original was not a valid one, the appellant submits.

Incidentally, earlier, the High Court had, after considering that the service tax demand was of Rs.71.58 lakhs with penalty and the aggregate amount worked out to Rs.1.43 crores, directed the appellant to deposit an amount of Rs.1 crores to show his bonafide and which amount was deposited on 22.11.2017 whereafter the High Court had directed the respondent department not to take any coercive steps against the appellant for securing recovery of balance amount.

When the matter was heard recently, the High Court observed that the questions whether service can be said to be valid or not and relevance of answer to this question, insofar as prayer for condonation of delay is concerned, arise for adjudication in this appeal as substantial questions of law.

After perusal of the findings recorded by the appellate authority, the High Court added -

+ After making efforts to complete service through post on last known address and after the envelope containing impugned order was received back, direct recourse has been taken to publication of notice in terms of Section 37C (1)(c). Thus, there is no recourse to procedure prescribed by Section 37C (1)(b).

+ Language in sub-clause (1)(c) itself shows that when there is failure to complete service in manner provided in clauses (1)(a) and (1)(b), recourse to said subclause (1)(c) is open. The impugned order does not even mention this aspect.

+ The authority passing impugned order has not looked into relevant aspects having material bearing on answer to these questions. Thus, there is non-application of mind.

The impugned order dated 23.01.2017 was quashed and set aside and the COD application was restored for fresh consideration.

The interim order of the Court directing the department not to take any coercive action was continued.

The appeal was allowed and disposed of .

Quick reference:

Section 37C. Service of decisions, orders, summons, etc.- 

(1) Any decision or order passed or any summons or notices issued under this Act or the rules made thereunder, shall be served,—

(a) by tendering the decision, order, summons or notice, or sending it by registered post with acknowledgement due [or by speed post with proof of delivery or by courier approved by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963)], to the person for whom it is intended or his authorised agent, if any;

(b) if the decision, order, summons or notice cannot be served in the manner provided in clause (a), by affixing a copy thereof to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case may be, is intended;

(c) if the decision, order, summons or notice cannot be served in the manner provided in clauses (a) and (b), by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice.

(See 2018-TIOL-437-HC-MUM-ST)