^^^^'•^t^iS'Mf^S^SSi^&^S^^S^^^ ^^•^^^^^^^^^^^^^^•^^^^::-^: :-r'- \^T^'^\\^^'-^[':~-^^-^-^:tr-^:^^^.'/^"~.-'^^':~..^^:^:-'^^^~"' .• APPELLANT: RESPONDENTS: A^F^ ^ %•\T- o>1 \...-' HI6H COURT OF CHHATTES6ARH AT BILASPUR Tax Case No.54 of 2009 Bharat Sanchar Nigam Ltd. r Versus Central Excise & Service Tax Tribunal (CESTAT) and another JUD6MENTFOR CONSI&ERATION Sd/- Dhirendra Mishra Judge HON'BLE MR. JUSTTCE R.N. CHANDRiAKAR °) ^ Sd/- R.N. Chandrakar Judge POST FOR JU&6MENT ON00-12-2009 ^ Sd/- Dhirendra Mishra Judge HI6H COURT OF CHHATTISGARH AT BILASPUR Tax Case No.54 of 2009 APPELLANT: RESPON&ENTS: Bharat Sanchar Nigam Ltd. Through J.R. Armo, aged about 58 years, Son of Late Manohar Ram, Workin9 as Chief Accounts Officer (TR), Office of 6MT&, B.S.N.L., Raipur, District Raipur (Chhattisgarh) Versus Central Excise <& Service Tax Tribunal (CESTAT) through its President, West Block No.2, R.K. Puram, New Cielhi The Commissioner, Central Excise & Customs, Central Avenue Building, Raipur, District Raipur (Chhattisgarh) Present: Shri Naveen Kumar Singh uvith Shri Prakash Jha and Shri Sanjay Patel, Advocate for the appellant. Shri Bhishma Kinger, counsel for the r'espondents. bivision Bench: Hon'ble Shri Dhirendra Mishra & Hon'ble Shri R.N. Chandrakar. JJ^ JU&6MENT (Delivered on ^ December, 2009) The following judgment of the Court was delivered by Dhirendra Mishra, J. 1. The appellant has preferred this appeal under Section 35-S'of the Central Excise Act, 1944 (for short 'the Act') against the order of the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi, (for short 'CESTAT) whereby the appeal preferred by the appellant Corporation under Section 35-F of the Act has been dismissed on the ground of limitation. 2. ;Briefly stafed facts of the case are that a dispute with respect to payment of Service Tax for the period from 1994 to 2000 arose between the +1 •PV 33UDUIJ 3l|+ J.O 9/ UOJ4.33S jspun Xod oj. pa|!Dj. 34 4.Dq+ xbi aoiAjas j.o 4.unotUD 31)4. 6uip333X3 4.ou +nq ssnui+uoo 3jn|iDj. 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UO 3|qDIA3| 4.0U Sl XD^ 331AJ39 (n) 'fr66I '^lnf ^° sll!1 uo XD-t 331AJ3S ^o 4.usiu^Dd j.o uoi+sanb ou SDM sjsq^ '3jopjsq4. 'puo frgg^ 'A|nf 1 UIOJj. 3AI+33J.J.3 3pDlU SDM S33.1AJ3S 3UOl|d3|34.UO XDJ^ 331AJ3S (l) +D4+ p|34 (e/v-ajnxsuuy) T03Z-9-6 p34.op jspjo s+i spiA jndioy 'siuo+sn^ puo 3513x3 {o^u-ay j.o jsuoissjiuiuo^ SLLL '£ •3314.0U ssnoo MOI|S 344. dojp 04. ps+sanbsj puo soi+ou 344. ui ps6a||D S+3D^ 3L|4. p3+J8AOJ+U03 A|dsj J1344. ui 4.uD||sddD siji •3314.0U ssnoo Moqs ai|4. o+ p3i|daj 4.uD||9ddD aijj. •pasoduii 3q +ou p|noi|s p3XD|sp SD(W XD+ J.o 4.u30iADd l|31L|M Aq J.03J3L|4. 4.JRd JO i|4.uoiu ^jaAa joj. %g"i @ 4.S3J34.UI puo pasoduii 4.ou sq XDI 331AJ3S si|+ Aod 0+ 3jn|IDj. J13l|4. JOj. /4.|DU3d puo sSjDijojns j.o ^3| puo 331+ou 3i|j. ui papuotuap XDJ. soiAjag 344. /<i|m 04. SD ssnos MOI|S 04. uodn 6ui|p3 4.uD||sddD ai|4. 04. (i/y-sjnxsuuv) QOOZ-T-IT P3-1-DP aoi+ou D psnssi s+uspuodsaJ 3l|i •4.U3lUUJ3AOg [DJ4.U33 31)4. J.O sSuiflA SJD S+USlU+JDdap 31(4. l|4.0g •saioj.sn^ pUD 3S13X3 |DJ+U33 j.0 4.U3UI+JDd3Q 31)4. pUD UOj4.D31UnUllU033|3^ J.O 4.U3tU4.JDd3Q was further held that there is no reason for imposing penalty under Section 78 of the Finance Act, as there was no suppression of taxable value found. 4. The appellant furnished the statement showing the Service Tax fully calculated and deposited in the Government account before the Superintendent, Central Excise, Raipur vide his memo dated 30 October, 2001 (Annexure-A/5). However, the Superintendent demanded a sum of Rs.5,30,28,600/- as penalty and Rs.94,61,200/- as interest on delay vide his memo dated 13 February, 2002 (Annexure-A/6). The appeltant submitted representation before the Deputy Commissioner, Customs & Central Excise, Raipur and prayed for review of the order dated 26-2-2002 passed by the Superintendent vide Annexure-A/7. The appellant also submitted representation dated 29-4-2003 (Annexure-A/8) to the Superintendent mentioning therein that there was no delay in crediting the Service Tax amount, as the same was credited in the account of Central Government under account"('head No.MH-1225 instead of crediting the amount under the head No.MH-044. It isnot a delay in crediting in Government account, it was a mistake to bifurcate. Referring to the judgment of the Assistant Commissioner, Central Excise, Trinuveli Division, it was brought to the notice that interest and penalty for delay in crediting in account No.MH-044 was waived vide order dated 30t September, 1997. 5. Ultimately, the appellant referred the case to the Committee on Dispute, Sovernment of India (for short 'CoD') on 27-8-2004 and the Cob accorded permission to the appellant to file appeal before the CESTAT in its meeting dated 12-5-2005 (Annexure-A/10). Thereafter, the appellant preferred an appeal before the CESTAT on 9-3-2007 along with an application for condonation of delay vide Annexure-A/11, however, the appeal was dismissed on the ground that permission from CoD has not been obtained vide Arinexure-A/12. The respondents filed cross-objections on 21-6-2007 along with an application for condonation of delay in filing cross-objection before ; the CESTAT vide Annexure-A/13. On 22-2-2008, application for restoration •^-»flns~~'^,^^•rtiSL.-'^lm n (T -"°i~a:' of appeal was allowed vide Annexure-A/14, however, the appeal was dismissed on the ground of delay vide impugned judgment and order dated 21-5-2008. 6. Learned counsel for the appellant submitted that initially the appellant challenged the impugned order by way of writ petition in the 1-ligh Court, however, the petition was withdrawn with liberty to file appropriate appeal. The appeal preferred by the appellant was again dismissed vide order dated 6+ July, 2009 vide Annexure-A/20 on the ground of limitation. Thereafter, the appellant prefferred Special Leave to Appeal No.20334/2009 before the Supreme Court. The Supreme Court vide order dated 28-8-2009 directed the appellant to file Civil Appeal directly against the decision of the CESTAT dated 21st May, 2008 within a period of 3 weeks. It was further observed that if the Civil Appeal is filed within 3 weeks, the matter will not be dismissed on the ground of delay. Thereafter, the appellant preferred Civil Appeal No.27705/2009 before the Supreme Court, however, Special Leave to Appeal as well as Civil Appeal were disposed of vide order dated 19 October, 2009 with leave to the appellant to move the High Court in view of the amended Section 35-6 of the Act for condonation of delay in filing the Tax Appeal before the High Court. 7. He further submitted that the issue involved in this appeal between the same parties has already been decided by the GESTAT and the CESTAT vide its order of Annexure-A/9 has held thus;- "The appellant is a Department of Centrat Sovernment. • It is bound to make payment including crediting of the amount received from the subscribers towards the telephone charges and service tax in accordance with the directives given by the Chief Controller of Accounts. It is the case of the appellant that they were strictly following the procedure prescribed by the &OT headquarters in consultation with the Principal Chief Controller of Accounts and the Central Board of Excise <& Customs. This procedure was followed till March 1999. ^n v Thereafter the Seneral Manager is directly crediting the service tax to book account of the Central 6ovt. under the head 0044 in view of a circular issued in the year 1998. Thus the delay caused by the statement being sent to DOT Headquarters is being avoided. In the peculiar facts and circumstances of this case where the appellant is a Central fiovernment Department and that it had been strictly following the procedure approved by Principal Chief Controller of Accounts and which procedure has resulted in the delay and the fact that the amount received from the subscribers were deposited on a day to day basis in the Post Office to the account of the Central Government, we find that the appellant cannot be burdened with the liability to pay interest. We make it clear that this view is being taken only in the facts of this case where the delay is caused in depositing the service tax in the specific account of the Central ©overnment by none other than a department of the Central Government and also because of the fact that the amount was deposited in the account of the Central Government on a day to day basis. We, therefore, set aside the order impugned and allow the appeal." 8. The CESTAT, vide its final orders dated 21-2-2006 passed in appeal Nos.516 and 517 of 2006 preferred' by the BSNL, allowed the appeals with an observation that the demand of interest in the appellants' own ca?e has been set aside by the Tribunal on the ground that the tax had been paid in time and there was only delay in transferring from-one account head to another account head. Such delay in transfers has been held to be not attributable to ,-the appellant. FollQwing its earlier orders in the case of Chennai Telephones (BSNL) Vs. CCE. Chennai {2004 (174) ELT 246 (Tri.-Chennai)} and in appellant's ow(i case reported in {2003 (160) ELT 318 (Tri.-Del.)} and also in ,[2003 (156) El-T 397 (Tri.-Del.)}, the CESTAT held that the delay was not 7\ J i--'A r caused on account of BSNL and the delay was attributable to the Department of Telecom and, therefore, interest on account of delay could not be levied. 9. The CoD in its meeting dated 12-5-2005 recorded that the dispute between the BSNL and the Central Excise relates mostly to the period prior to coming into being of BSNL, a Public Sector Undertaking which has taken over the operations of telecom services in the country (except Mumbai and Delhi). The Service Tax calculated by the Department of Telecommunication was deposited in the Government account in time and the dispute pertains to only transfer of Service Tax deposited in time to the relevant budget head, which is only a procedural matter of transferring the amount from one account of the Goverrfment to the other account and, therefore, question of payment of any interest or penalty does not arise and accordingly, the Committee decided to give clearance to the BSNL to file appeal before the CESTAT. 10. It was further argued that the bepartment of Central Excise had also applied for clearance to file appeal against the order of the CESTAT dated 2-6-2003 whereby the CESTAT set aside the demand of interest on delayed payment of service tax for the period from 1998 to 2000, however, the Cot> decided not to grant clearance to CBEC with an observation that CESTAT has rightly set aside the demand of interest on delayed payment of service tax and these orders passed by the CESTAT setting aside imposition of interest and penalty for delay in transfer of service tax in the proper head have attained finality. In view of the orders passed by the CoD and considering the various orders passeb by the CESTAT between the BSNL and the Excise bepartment with respect to the identical dispute, the appellant was bonafidely representing • before the concerned authorities to review the impughed order whereby penalty for delay in transferring the service tax in correct head by the then Department of Telecommunication was imposed and thus, delay in preferring appeal is bonafide. 11. He further argued that the Commissioner amended its order of Annexure- A/3 dated 9-8-2001 vide its order dated 27-9-2001 and imposed penalty for delay in payment of service tax. An addendum of Annexure-A/4 is void ab IN. initio and without jurisdiction and it is non est in the eyes of law and the appellant could challenge the same at any stage. The Commissioner became functuous officio after passing the order of Annexure-A/3 and he could not amend the same and pass any order against the appellant by way of addendum. 12. Learned CESTAT in para-5 of the impugned order (Annexure-A/14-A) even after observing that even if delay upto 12-5-2005 or 6-7-2005 is assumed to have been explained, there was no justification to further delay the filing of appeal till 6-3-2007, dismissed the appeal as time barred with a finding that delay of more than 6 years in filing the appeal is too enormous to ignore. 13. On the other hand, learned counsel for the respondents submitted that there was inordinate delay of more than 6 years in preferring this appeal. The appellant instead of preferring the appeal against the order of the Commissioner went on frivolous representations/petitions before the authoritiesof the Excise Department for reviewing the order and canceling the penalty and fine whereas, the only remedy available to the appellant in this matter was by filing appeal under Section 35-F. The appellant has utterly failed to explain inordinate delay of 6 years in filing the appeal, as no sufficient cause has been shown for the delay. In any case, there was no reason for the appellant not to file appeal after obtaining clearance from the Co& in May/July 2005 and the appeal was preferred in the year 2007. Reliancs is placed in the matters of Calcutt-a Municipal Corporation Versus Pawan Kumar Saraf and another,Commissioner of Central Excise, Cochin Versus Shri Mathew Kurian, Prop. South India Products and Collector of Central Excise, Madras Versus A. Md. Bilal and Co .. 14. We have heard learned counsel for the parties. We have perused the entire record. 15. In the matter of Pawan Kumar Saraf and another (Supra), Special Leave "e Petition against' the order made in revision by the Calcutta High Court l;ft?99) 2 Supreme Court Cases 400 21999 AIR SCW 3867 3 1999 AIR SCW 4740 upholding the order of the trial Court acquitting the respondents of an offence under Section 7/16 of the Prevention of Food Adulteration Act, 1954 with a delay of 309 days. In these circumstances, it was observed that it is true that the Court should be liberal in condoning the delay in filing the petition, but delay is inexcusable unless sufficient cause is shown. It is not the law that when application seeking condonation of delay is filed by the State or any authority, the Supreme Court must invariably condone the detay irrespective of whether sufficient cause isshown or not. 16. In the matter of Shri Mathew Kurian (Supra), the Excise Department preferred an appeal under Section 35-L before the Supreme Court with a delay of 478 days. The Supreme Court, after extracting the reasons assigned for delay by the appellant which was full of mistakes, observed that the appeal has been prepared and filed in a casual manner without taking the trouble of perusing the draft and the appellant has taken the Court for granted and also considering that only single dealing hand was held responsible for the delay, without any further detail about any action against the erring dealing hand, rejected the application for condonation of delay. 17. In the matter of A. Md. Bilal (Supra), appeal under Section 35-L of the Excise Act was filed by the department with a delay of 502 days, however, in the application seeking condonation of delay, no explanation, worth the name, let alone a satisfactory or reasonable explanation has been offered. In the circumstances, application for condonation of delay was dismissed. 18. In the instant case, we find that; • The dispute is admittedly between the two departments of the Sovernment of India with respect to payment of service tax by the appellant. • Initially, the Commissioner by its order of Annexure-A/3 held that the Superintendent, Central Excise Range Service Tax, Division Raipur should calcutate the interest on delayed payment of Service Tax © 1:5% for every month or part of a month for delay in depositing the interest other than the surcharge on delayed payment of telephone liij " ^ *>:".^-^% ^ ""RS^^A ^ ^WSK-^ •} ^..^gj bills of July, 1994 and recover the amount and further withdrew the show cause notice and dropped the proceedings. Subsequently, the order has been amended on 27-9-2001 by way of addendumand penalty of Rs.200/- for every day during which the failure continues but not exceeding the amount of Service Tax that he failed to pay has been imposed. • From perusal of the documents filed by the appellant, it appears that identical dispute between the same parties has been finally decided by the CESTAT in favour of the appellant and imposition of service tax and penalty for delay in depositing service tax has been set aside on the ground that there is no delay in depositing the service tax and delay is only with respect to transfer of service tax in the &overnment account to a correct budget head. • The appellant was permitted by the Committee on Dispute vide its meeting dated 12-5-2005 with the observations which we have already reproduced in the foregoing paragraphs. The appellant bonafidely believing that the authorities would consider theimposition of penalty and interest in the light of theobservations made by the Co&and also in the light of various judgments of the CESTAT in the subject matter between the same parties went on submitting representations before the authorities of the respondents. 19. In these circumstances, we are of the opinion that the cause shown by the appellant was sufficient and bonafide and the CESTAT ought to have entertained the appeal after condoning the delay in filing the appeal. 2U.In the result, the appeal is allowed and the impugned order'is set aside. The matter is remanded back to the CESTAT with a direction to hear the appeal on merits after condoning the delay in filing the appeal. No orders as to costs. e--—-— — — Sd/- DhirendraMishra Judge Sd/- R.N. Chandrakar Judge .^ Barve