Commissioner must examine Factual matrix of service of an order before Dismissal of Time barred Appeal: CESTAT remands Sri Balaji Electricals Case [Read Order]

Recently, the Hyderabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed an appeal, holding that a Commissioner (Appeals) must examine the factual matrix regarding the service of an order before dismissing an appeal as time-barred.

M/s Sri Balaji Electricals, the assessee appellant filed an appeal against an Order-in-Appeal dated 11.07.2024. The appeal challenged the dismissal of their original appeal against an Order-in-Original (OIO) dated 25.03.2022. The Commissioner (Appeals) had dismissed the appellant's appeal solely on the grounds of limitation, without examining its merits. The appellant argued they were delayed in receiving the original order, a fact supported by a tenant's undertaking, which should have been considered when calculating the limitation period.

The department's Authorized Representative supported the lower order, contending that the Commissioner (Appeals) was correct. He argued that the appeal was filed well beyond the statutory three-month limit (two months plus one month for condonation), and the Commissioner had no statutory power to condone a delay of this magnitude.

The appellant's counsel argued that the Commissioner (Appeals) erred by not examining the factual circumstances, particularly the undertaking from their tenant which explained the delay in receiving the order. They contended that the limitation period should be calculated from the date of actual receipt of the order, not its date of issue.

The two member bench of Mr. A.K. Jyotishi (Technical Member) and Mr. Angad Prasad (Judicial Member), found merit in the appellant's contention. The tribunal agreed that the Commissioner (Appeals) indeed lacks the power to condone a delay beyond three months. However, it held that before reaching this conclusion, the Commissioner was obligated to first examine the statutory provisions on service of notices and the factual matrix to determine the actual date the appellant received the order. The failure to conduct this preliminary examination was a procedural flaw.

Accordingly, the CESTAT allowed the appeal by way of remand, setting aside the Commissioner (Appeals)' order. The matter was sent back to the Commissioner (Appeals) to properly examine the facts and determine the correct limitation period before deciding on the maintainability of the appeal.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates