Mats Engineering Private Limited vs The Customs Excise Service Tax

M. Sathyanarayanan, J.—Mr.V.Sundareswaran, learned counsel takes notice for the respondents. By consent, the main appeal, itself is taken up for final disposal.

This appeal is filed by the appellant against the order of Customs, Excise & Service Tax Appellate Tribunal (for short ''CESTAT'') made in Final Order No.40165 of 2014 dated 07.3.2014 in ST/COD/42397/2013 and ST/S/42398/2013 and ST/42446/2013. The appellant herein is the applicant before the CESTAT in ST/COD/42397/2013 and ST/S/42398/2013.

Brief facts are that the Deputy Commissioner of Service Tax, Chennai V Division had issued show cause notice to the appellant on 21.4.2009 proposing the demand of a sum of Rs.41,200/- along with appropriate interest on the ground that the appellant cannot have the benefit of the provisions of Rules 6(3) or (4A), 4(B) of the Service Tax Rules and also proposed to impose penalty under Section 76 of the Finance Act, 1994. The appellant submitted their response dated 26.5.2009 to the said show cause notice and the Deputy Commissioner of Service Tax, Chennai V Division viz., the Original Authority had confirmed the proposal made in the show cause notice and aggrieved by the same, the appellant preferred appeal before the Commissioner of Central Excise (Appeals), Chennai. By order dated 19.2.2013, the Commissioner of Central Excise (Appeals), Chennai has modified the order of the Original Authority by setting aside the penalty imposed under Section 76 of the Finance Act, 1994 and aggrieved by the same, the appellant preferred appeal before the CESTAT with a delay of 196 days. The appellant herein along with the appeal has filed application under Section 35B(5) of the Central Excise Act to condone the delay of 196 days in filing the appeal.

In paragraphs 3 and 4 of the said application, it has been stated among other things that the daughter of the Director of the appellant Company, who was then working as a clinical embryologist was suffering due to Pneumonia and was taking treatment in a private hospital at Mangalore and she died due to the said ailment of Pneumonia on 16.11.2012 and further stated that on account of the same, he was not in a position to attend the day to-day business affairs of the Company, which remained unattended for a very long time and therefore, the delay occurred. It has also been specifically stated that the person, who was in-charge of dealing with the legal issues, left the Company in the month of March, 2013 and subsequently, the affairs of the Company came to stand still. Hence, prays for condonation of the delay of 196 days in filing the appeal.

The CESTAT found that the reasons for the delay adduced by the appellant herein are not proper and dismissed the application seeking for condonation of delay. Hence, this appeal.

In the grounds of appeal, the following substantial questions of law have been raised:-

(1) Whether the Tribunal was correct in holding that the death of the daughter of the Director of the appellant Company and that the fact of the concerned employee of the appellant Company left the job during the relevant period is not relevant or admissible reasons for condonation of delay is just and proper in the light of the discretionary powers conferred on the Tribunal under provisions to Sec. 35B(5) of the Central Excise Act, 1944, made applicable to the Finance Act, 1994?

(2) Whether the Tribunal was correct in refusing to condone the delay of 196 days by recording the above reasons even when the law only requires the Tribunal to go into the sufficiency of such reasons adduced for seeking the condonation of delay?

(3) Whether the Tribunal was correct in not following the dictates of the higher Courts that so long as there is no wilful act or gross negligence on the part of the appellant, interest of justice requires that such delay need to be condoned?

(4) Whether the Tribunal was correct in not considering that the appellant right of appeal would be totally defeated and that justice would be denied to the appellant by refusing to condone the delay?

Heard the submissions of Mr.N.Viswanathan, learned counsel appearing for the appellant and Mr.V.Sundareswaran, learned Standing Counsel appearing for the respondents.

By perusal of the averments stated in the application filed for condonation of delay, more particularly, paragraphs 3 and 4, would disclose that the daughter of the Director of the appellant Company was suffering from Pneumonia and she died on 16.11.2012 and also the person, who is looking after the legal issues of the appellant Company had left the services and therefore, the administration of the Company could not be carried on, on account of his absence, which resulted in filing the appeal with delay condonation application.

In the considered opinion of this Court that the reasons adduced in the application seeking condonation of delay of 196 days in filing the appeal are proper and sufficient cause has also been made out by the appellant for condoning the delay and therefore, the CESTAT was not right in rejecting the said application. Therefore, substantial questions of law raised in the grounds of appeal answered in affirmative in favour of the appellant.

In the result, the Civil Miscellaneous Appeal is allowed and the order of the CESTAT dated 07.3.2014 made in Final Order No.40165 of 2014 in Appeal No.ST/COD/42397/2013 in ST/Stay/42398/2013 in ST/42446/2013-SM, is set aside and the delay of 196 days in filing the appeal is condoned. If the appeal papers presented by the appellant Company are in order, the CESTAT is directed to number the appeal and dispose of the same in accordance with law, as expeditiously as possible. There is no order as to cost in this appeal. Consequently, M.P.No.1 of 2014 is closed.