M/S. Lgw Limited vs. The Assistant Commissioner, Service Tax, Division-Ii And Ors

Held

The High Court allowed the appeals, setting aside the order of the learned Single Bench and the order of the Tribunal. The Court acknowledged the appellant's lack of diligence but was persuaded to interfere due to the subsequent order by the Assistant Commissioner sanctioning a refund for an earlier period, which accepted the appellant's classification of specified taxable services. The Court reasoned that this development, concerning the same nature of services, was a significant factor to be considered by the Tribunal. The Miscellaneous Applications for condonation of delay were restored to the file of the Tribunal for fresh consideration. The Tribunal was directed to take note of the observation that the department had accepted the appellant's classification for the earlier period. The Court also granted liberty to the revenue to raise the issue of interest liability before the Tribunal, which would be considered. The appeals were allowed, and the writ petition was allowed.

Facts

The appellant, M/s. LGW Ltd., filed multiple intra-court appeals against the order of a learned Single Bench dated August 18, 2021, which upheld the dismissal of miscellaneous applications by the Customs, Excise and Service Tax Appellate Tribunal (Tribunal). The Tribunal had dismissed these applications for condoning the 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 appellant's initial appeal before the first appellate authority was dismissed as time-barred. Subsequently, the appeal before the Tribunal also suffered from an inordinate delay. The High Court noted the appellant's lack of diligence in prosecuting the matter at both stages. However, a subsequent development involved an order dated April 10, 2019, by the Assistant Commissioner of Central Excise, Bidhannagar Division, sanctioning a refund of Rs. 13,59,282/- for a prior period (April 2008 to September 2008) based on the appellant's classification of services.

Key Issues

1. Whether the learned Tribunal erred in dismissing the appellant's applications for condonation of delay in filing the appeal, thereby refusing to consider the appeal on merits, given the circumstances? Petitioner's arguments: The appellant contended that despite the delay, the subsequent order by the Assistant Commissioner sanctioning a refund for an earlier period, accepting the appellant's classification of services, warranted a fresh consideration of the delay condonation application by the Tribunal. They argued that this development, coupled with the refund claim for a subsequent period, presented peculiar facts justifying condonation. Revenue's arguments: The revenue supported the findings of the Tribunal and the first appellate authority. They argued that the appellant had not shown sufficient cause for the inordinate delay and had not diligently prosecuted the matter. The revenue also submitted that if the Tribunal ultimately allowed the refund claim, they should not be liable for interest for the entire period.