M/S. Lgw LTD vs. The Asst. Com. Service Tax, Div. Ii And Ors.

Held

The High Court allowed the appeal, setting aside the order of the learned Single Bench and the order of the Tribunal. The Court acknowledged the petitioner's lack of diligence but was persuaded to interfere due to a subsequent order dated April 10, 2019, by the Assistant Commissioner, Central Excise, Bidhannagar Division. This order sanctioned a refund for the period April 2008 to September 2008, accepting the petitioner's classification of specified taxable services used for export of goods. The Court reasoned that this acceptance of classification by the department for an earlier period was a significant factor to be considered by the Tribunal when deciding the condonation of delay application for the subsequent period (October 2008 to December 2008). The miscellaneous applications for condonation of delay were restored to the file of the Tribunal for fresh consideration, with a direction to take note of the observations made by the High Court, particularly the department's acceptance of the petitioner's classification for the earlier period. The revenue was given liberty to raise the issue of non-payment of interest on remand before the Tribunal.

Facts

The petitioner, M/s. LGW Ltd., filed an intra-court appeal against an order of the learned Single Bench which upheld the dismissal of miscellaneous applications by the Customs, Excise and Service Tax Appellate Tribunal (Tribunal). The Tribunal had dismissed the applications for condonation of delay in filing an appeal against an order dated February 20, 2013, passed by the Commissioner of Central Excise and Service Tax (Appeals-I). The petitioner had filed an appeal before the first appellate authority which was dismissed as time-barred. Subsequently, the appeal before the Tribunal also suffered from inordinate delay. The High Court noted the petitioner's lack of diligence in prosecuting the matter. However, a subsequent development involved an order dated April 10, 2019, by the Assistant Commissioner, Central Excise, Bidhannagar Division, sanctioning a refund of Rs. 13,59,282/- for the period April 2008 to September 2008, based on the petitioner's classification of specified taxable services used for export of goods.

Key Issues

1. Whether the learned Tribunal erred in dismissing the applications for condonation of delay in filing the appeal against the order of the Commissioner (Appeals-I), thereby refusing to condone the inordinate delay? Petitioner's contention: The petitioner argued that despite the delay, the matter should be considered afresh by the Tribunal, especially in light of a subsequent refund order for an earlier period that accepted their classification of services. They implicitly sought condonation of delay based on this subsequent development. Revenue's contention: The revenue supported the findings of the Tribunal and the first appellate authority, arguing that the delay was inordinate and not sufficiently explained, and that the Tribunal correctly exercised its discretion in dismissing the applications for condonation of delay. They acknowledged that the first appellate authority cannot condone delay beyond statutory limits.