The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has ruled that an Order-in-Original under the Central Excise Act, 1944 must first be affixed at a conspicuous part of the factory before it can be posted on the notice board of the department.
The decision was rendered by the CESTAT while adjudicating an appeal filed by Patel Steels against the Commissioner of Central Excise and State Taxes, Bhavnagar challenging the dismissal of its case by the Commissioner (Appeals) citing grounds of disqualification by virtue of time bar.
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The facts leading up to the institution of the present case follow the attempt to serve an Order-In-Original at the Appellant’s factory premises. Rahul Gajera, counsel appearing on behalf of the appellant submitted that at the time of service, Patel Steels’ factory was closed and the excise department attempted to serve the Order-In-Original via registered post which was returned undelivered.
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The Counsel averred that the Department had strayed from the correct sequence of process under Section 37C(1) of the Excise Act requiring the department to affix the order at a conspicuous location at the factory and proceeded to directly post it on the notice board at the office of the Assistant Commissioner.
The Appellant was later apprised about the Order-In-Original while recovery proceedings were being undertaken at the residence of one of the company’s partners and subsequently requested a copy, which was provided on March 27, 2015.
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Subsequently, the Petitioner company filed an appeal before the Commissioner (Appeals) who rejected the on grounds of limitation of time.
Counsel for the Revenue, Superintendent (AR) Anand Kumar reiterated the findings of the impugned order.
Judicial Member Ramesh Nair presiding over the Bench examined the statutory provisions under Section 37C and held that the department had failed to follow the mandatory sequence of service.
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Emphasizing that service of an Order-in-Original must strictly adhere to the prescribed order – first through registered post, then to be affixed at the factory, and only upon the failure of these steps shall the same be posted on the departmental notice board.
Observing the failure of the Department to follow due process, CESTAT ruled that the order was not served properly and thus set aside the impugned Order-in-Original.
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