Sanjayraj Hotels and Resorts Pvt. Ltd. vs Union of India

V.M. Pancholi, J.—Heard learned counsel appearing for the parties for final disposal of the petition. The present petition is filed by the petitioners seeking prayer to quash and set aside an order dated 20-8-2014 passed by the Appellate Tribunal, Ahmedabad and thereby direct the said Appellate Tribunal to hear and decide the Appeal No. S.T./12052/2014 in accordance with law without raising the question of delay caused in filing the said appeal.

Brief facts leading to the present petition are as under :

"2.1 The petitioners, a private limited company, is running a club for its members where various facilities are provided to the members. On 20-10-2011, a show cause notice was issued by the Joint Commissioner of Central Excise and Service Tax proposing to recover Service Tax under Event Management Service and also under Club or Association Service. The petitioners filed the reply to the show cause notice on 22-12-2011.

2.2 The Joint Commissioner passed an adjudication order on 31-8-2012, whereby the demand under Event. Management Service was dropped. However, the Joint Commissioner confirmed the Service Tax demand for amount of Rs. 7,64,538/- under Club or Association Service.

2.3 The petitioners therefore, challenged the said order before the Commissioner (Appeals). The Commissioner (Appeals) dismissed the appeal on merits by an order dated 30-7-2013.

2.4 The petitioners thereafter, filed Appeal Being No. ST/12052/2014 before the Customs Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad. Since there was a delay of 175 days in preferring the said appeal, the petitioners also filed an application for condonation of delay caused in preferring the said appeal. In the said application, the petitioners pointed out in paragraph nos. 2 and 3, why there was a delay in filing the said appeal.

2.5 The Tribunal by way of impugned order dated 20-8-2014 rejected the said application mainly on three counts. Firstly, that the applicants original appellants were represented by authorised signatories of the appellant and the authorised representative was summoned and statement was recorded. Thereafter, a show cause notice was issued to the appellant which was not replied, nor did the appellant''s representative participate in the adjudication proceedings. Thus, when the first appeal was preferred, there was a delay of 15 days and therefore, it was held by the Tribunal that the appellant had taken the issue very lightly. Secondly, that there is delay in filing the second appeal before the Tribunal and in the application for condonation of delay, the affidavit is not sworn by the Director or the authorised representative of the petitioner company. Thirdly, that the authorised representative who was employed by the company, could have given the statement before the authorities and also could have filed the appeal on behalf of the appellant in time. The Tribunal thus rejected the said application of the petitioners. The petitioners have therefore, preferred the present petition."

Having perused the materials on record, in our opinion, the Tribunal has committed an error by rejecting the application filed by the petitioner for condonation of delay caused in filing the appeal and also committed an error by not considering the grounds set out in paragraph nos. 2 and 3. In paragraph nos. 2 and 3 of the application for condonation of delay, the applicants have shown sufficient cause for not preferring the appeal within the limitation period. Thus we are of the considered opinion that sufficient cause is shown by the original appellants applicants in the application for condonation of delay. Even otherwise, opportunity is required to be given to the petitioners to submit their case on merits before the Appellate Tribunal.

In the result, the present petition is allowed. Order dated 20-8-2014 passed by the Tribunal is hereby quashed and set aside. The Appellate Tribunal is hereby directed to decide appeal being No. ST/12052/2014 in accordance with law and on its own merits. With aforesaid observations, the petition is disposed of.