Appeal Filed Within Limitation Cannot Be Rejected for Later Pre-Deposit: CESTAT Ahmedabad
Pranav B Prem
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), comprising Somesh Arora (Judicial Member) and Satendra Vikram Singh (Technical Member), has held that where an appeal is filed within the prescribed limitation period, it must be heard on merits even if the mandatory pre-deposit is made at a later stage. The Tribunal ruled that such appeals cannot be rejected as time-barred merely because the appeal papers were returned for non-payment of pre-deposit and subsequently re-filed.
The matter arose from an order passed by the Commissioner (Appeals), CGST & Central Excise, Vadodara, rejecting the appeal filed by Shri Govind Guru University on the ground that the mandatory pre-deposit had not been made. It appeared that the appeal papers were returned to the appellant for non-compliance, and when the appeal was later filed after making the deposit, it was treated as beyond limitation and rejected.
Before the Tribunal, the appellant contended that this practice of returning appeal papers instead of issuing a defect memo was incorrect and contrary to the procedure followed by appellate forums. It was submitted that the pre-deposit amount had been paid at the stage of the Commissioner (Appeals), but instead of allowing rectification of the defect, the papers were returned. Reliance was placed on the decision of the Gujarat High Court in Ramesh Vasantbhai Bhojani v. Union of India, wherein a distinction was drawn between the expression “entertain” used in Section 129E and “filing” of an appeal under Section 128 of the Customs Act, 1962. The High Court had held that filing of an appeal within the prescribed time is distinct from the requirement of pre-deposit for entertaining the appeal.
The Tribunal noted that similar views had been taken in West Asia Maritime Limited v. Commissioner of Central Tax, Visakhapatnam and Conart Engineers Limited v. Commissioner of Central Excise and Service Tax, Vadodara-I, where it was held that an appeal filed within limitation should not be rejected solely on account of delayed pre-deposit, provided the defect is subsequently cured.
Observing that filing of an appeal clearly indicates the intention of the party to litigate the matter, the Tribunal held that any defect noticed upon scrutiny ought to be addressed by way of correspondence or issuance of a defect memo, rather than by returning the appeal papers. It remarked that such a procedure is consistent with the practice followed by the Tribunal as well as by various High Courts and the Supreme Court.
Taking into account that the pre-deposit had ultimately been made, the Tribunal held that the appellant deserved an opportunity to be heard on merits. It concluded that rejection of the appeal on limitation grounds in such circumstances was unsustainable. Accordingly, the Tribunal set aside the order of rejection and remanded the matter to the Commissioner (Appeals) for fresh adjudication on merits. The appeal was allowed by way of remand.
Appearance
Counsel For Appellant: Abhay Y Desai, Advocate
Counsel For Respondent: Mihri G Rayka, Additional Commissioner (AR)
Cause Title: Shri Govind Guru University Versus Commissioner Of C.E. & S.T.-Vadodara-Ii
Case No.: Service Tax Appeal No. 10714 Of 2020
Coram: Somesh Arora (Judicial Member) and Satendra Vikram Singh (Technical Member)
