Law Point : Service of Notice is Mandatory in Tax Matters
Case Title : Duggar Fibre Pvt. Limited vs. Commissioner of Central Excise and Customs (Customs, Excise and Service Tax Appellate Tribunal)
Brief of the Case : The Appellant filed refund claim for Rs.34,42,038. The refund sanctioning authority vide order-in-original sanctioned the refund for Rs. 34,42,218 to Duggar Fibre Pvt. Limited, paid through RTGS. Thereafter, Revenue filed appeal before Commissioner (Appeals) against refund order on the ground that, the said refund was already “time barred”. The application for refund was filed after expiry of one year from the relevant date i.e. date of order-in-appeal.
Vide Order-in-appeal dated 10th April, 2018, the learned Commissioner (Appeals) observing that, the order-in-appeal dated 28th May, 2012 was despatched through speed post to all the parties at their address, and none of the despatch envelop were returned back by the Postal Department. Accordingly, service on the parties was presumed and the claim was held to be barred by limitation. Further, the appellant has also claimed that the duty was deposited during investigation and under the facts and circumstances, it should be treated as payment under protest. The Commissioner (Appeals) observed that, in absence of clear procedure of “under protest” having been followed, presumption of such payment under protest can’t be taken as correct.
Being aggrieved, the Appellant is before this Tribunal on the grounds amongst others that, the Commissioner (Appeals) have erred in presuming service of the order- in-appeal dated 28th May, 2012, without there being any proof of service on the Appellant.
The impugned order has been passed on the presumption by the Commissioner (Appeals) that the order-in-appeal dated 28th May, 2012 was served on the appellant, on the basis of evidence of despatch and the contention of the Department that such despatch was not returned back by the Post Office. The learned Commissioner have erred in making the presumption in absence of proof of delivery produced by the Department. During the relevant time as per the provisions of Section 37C(1)(a) of the Central Excise Act, 1944, any order passed under the Act was to be served through registered post or speed post to the person for whom it was entitled or his authorised agent with acknowledgement due or proof of delivery. Thus, it was incumbent upon the Revenue to produce evidence of delivery or service which is the mandate as per Section 37C(1)(a) of the Act. In absence of proof of delivery, order dated 28th May, 2012 cannot be deemed as served on the appellant, as has been held by the Hon’ble Rajasthan High Court in the case of R. P. Casting Pvt. Limited and also Gujarat High Court in Regent Overseas Pvt. Limited vs. Union of India and also by the Hon’ble Supreme court in Saral Wearcraft vs. CCE&ST. In absence of such proof of delivery, it is held that the presumption is not sustainable and accordingly, the application of the Appellant for refund cannot be held time barred.
The amount in question was collected by the Department without issue of show cause notice at the investigation stage, and further, the Appellant have contested the show cause notice, as well as, has been constantly in appeal pursuant to adjudication, and thus, the amount in question is held to be deposited “under protest”. Further, the Assistant Commissioner in order-in-original (refund order) have accepted the fact of payment under protest. Thus, it is held that the limitation of one year as prescribed under Section 11B (1) of the Act is not applicable in the facts and circumstances. Director of B.B. Steels Pvt. Limited, have retracted his statement soon after recording of his statement, every time, which was the basis of the whole proceedings against this Appellant. Hon’ble Madras High Court in the case of CCE, Coimbatore vs. Pricol Ltd. has held that, any amount deposited by pre-deposit or during the course of investigation, is definitely in the nature of deposit “under protest”. Accordingly, the impugned order is set aside. Appeal is allowed.
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Tags: Service of Notice is Mandatory in Tax Matter