P.K.Muthu vs. The Commissioner Of CGST And Central Excise (Appeals) Coimbatore

Held

The Court quashed the impugned Order-in-Appeal dated 20.07.2026. The Court reasoned that considering the petitioner had deposited 7.5% of the disputed tax as required under Section 35F of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, and balancing the interests of the petitioner, it was inclined to remit the matter back. The Court directed the second respondent (Deputy Commissioner of CGST & Central Excise) to pass a fresh order in lieu of the Order-in-Original dated 10.01.2022. The petitioner was also directed to file a reply to the Show Cause Notice dated 19.12.2020 within thirty days of receiving the order, treating the Order-in-Original as an addendum to the Show Cause Notice. If the reply is filed within the stipulated period, the second respondent is to pass fresh orders on merits and in accordance with law within three months thereafter, after hearing the petitioner. If the petitioner fails to file the reply, the second respondent is at liberty to proceed as if the writ petition was dismissed.

Facts

The petitioner, P.K.Muthu, filed a writ petition challenging an Order-in-Appeal dated 20.07.2026 passed by the Commissioner of CGST & Central Excise (Appeals). This order rejected the petitioner's appeal against an earlier order dated 02.09.2022, which in turn had rejected a rectification application filed on 27.08.2022. The rejection of the appeal was on the grounds of limitation. The petitioner had previously suffered an Order-in-Original dated 10.01.2022 from the Deputy Commissioner of CGST & Central Excise, confirming a Show Cause Notice issued on 19.12.2020, to which the petitioner had not filed a reply. The petitioner had deposited 7.5% of the disputed tax at the time of filing the appeal.

Key Issues

1. Whether the first respondent erred in rejecting the petitioner's appeal on the grounds of limitation, considering the procedural history and the petitioner's deposit of pre-deposit amount? The petitioner contended that the impugned order of the first respondent, rejecting the appeal on limitation, was erroneous. The petitioner argued that they had deposited the mandatory pre-deposit of 7.5% of the disputed tax as required under Section 35F of the Central Excise Act, 1944, read with Section 83 of the Finance Act, 1994, when filing the appeal. The petitioner sought to have the matter decided on merits. The respondents, represented by the Senior Standing Counsel (GST & Customs), did not present any specific arguments in the provided text, but their counsel took notice of the petition and appeared before the court.