Nerumbally and Co Vs Commissioner of Service Tax (Appeals) (CESTAT Bangalore)
Limitation Period for Service Tax Appeal Starts from Receipt of Order, Not Dispatch Date; CESTAT Remands Service Tax Refund Appeal Because Department Failed to Prove Delivery of Order; Appeal Filing Deadline Cannot Be Calculated from Date of Issue Alone; No Proof of Communication Means Delay in Service Tax Appeal Requires Fresh Examination; Service Tax Refund Appeal Restored Because Communication of Order Was Not Verified; CESTAT Says Actual Receipt of Adjudication Order Determines Limitation for Appeal Filing.
The CESTAT Bangalore heard an appeal against Order-in-Appeal dated 21.08.2015 passed by the Commissioner of Service Tax (Appeals), Bangalore. The appellant was operating a hotel from premises rented from Karnataka State Road Transport Corporation (KSRTC). KSRTC had collected service tax from the appellant under the category of “Renting of Immovable Property Service” in addition to rent. The appellant claimed that the amount collected for running the hotel was not taxable under that category and accordingly filed refund claims amounting to ₹4,25,937 for January 2011 to December 2011 and ₹2,42,406 for March 2012 to July 2012. The adjudicating authority rejected the refund claims.
The appellant thereafter filed appeals before the Commissioner (Appeals), which were rejected on the ground of delay. The appellant contended that the Orders-in-Original dated 20.08.2013 and 26.08.2013 were actually received only on 12.12.2013 and the appeals filed on 06.02.2014 were within the limitation period prescribed under Section 85 of the Finance Act, 1994. It was argued that the Commissioner (Appeals) wrongly assumed that the date of issue of the orders was the date of communication without verifying actual service of the orders.
The Tribunal observed that the core issue was whether the Orders-in-Original had been communicated to the appellant before 12.12.2013. It noted that the Department had not produced any proof showing delivery or communication of the orders to the appellant. In the absence of such evidence, the Tribunal held that the matter required reconsideration. The case was remanded to the Commissioner (Appeals) with directions to provide the appellant an opportunity of hearing and ascertain from the field formations the actual date of communication of the Orders-in-Original. The appeals were allowed by way of remand.
FULL TEXT OF THE CESTAT BANGALORE ORDER
This is an appeal filed against Order-in-Appeal No.111 & 112/2015 dated 21.08.2015 passed by the Commissioner of Service Tax (Appeals), Bangalore.
2. Briefly stated the facts of the case are that the appellant was running a hotel from the premises belonging to M/s. Karnataka State Road Transport Corporation (KSRTC, for short), which was taken by them on rental basis. Certain amount has been collected by KSRTC as service tax over and above the agreed upon rent amount payment towards ‘Renting of Immovable Property Service’. The appellant has contended that the amount collected by KSRTC for running a hotel is not taxable under the said category; hence, the appellant filed refund claims with the Department for refund of service tax collected by KSRTC from them, being amount of Rs. 4,25,937/- for the period January 2011 to December 2011 and Rs.2,42,406/- for the period March 2012 to July 2012, which were rejected by the adjudicating authority. Aggrieved by the said order, they filed appeals before the learned Commissioner(Appeals) who in turn rejected the same on the ground of delay in filing appeals before him. Hence, the present appeals.
3. At the outset, the learned advocate for the appellant has submitted that the Order-in-Original dated 20.08.2013 and 26.08.2013 rejecting their refund claims were received only on 12.12.2013 and the appeals were filed before the learned Commissioner(Appeals) on 06.02.2014 within two months from the date of receipt of the Orders-in-Original as per Section 85 of the Finance Act, 1994. Whereas the learned Commissioner(Appeals) had rejected their appeals observing that there has been a delay of more than three months from the date of communication of the order. He has submitted that the orders dated 20.08.2013 and 26.08.2013 were not communicated to them before 12.12.2013. The learned Commissioner(Appeals) has, without verification of the communication of the orders, assumed that the date of issue of the order be considered as the date of communication and rejected their appeals.
4. Learned AR for the Revenue has reiterate the findings of the learned Commissioner(Appeals).
5. Heard both sides and perused the records.
6. We find that the short issue involved in the present appeal is whether Orders-in-Original dated 20.08.2013 and 26.08.2013 were communicated to the appellant before 12.12.2013. It is the claim of the appellant that they were not communicated with the orders prior to 12.12.2013 even though the orders dated 20.08.2013 and 26.08.2013 might have been issued / despatched to the appellant through Registered Post / Speed Post. From the records, we find that the Department did not place on record the proof of communication of the Orders-in-Original dated 20.08.2013 and 26.08.2013 as observed to have been delivered to the appellant. In these circumstances, it is appropriate to remand the matter to the learned Commissioner(Appeals) to allow an opportunity to the appellant to present their case. Also, learned Commissioner(Appeals) is directed to ascertain from the field formations the actual date of communication of the Orders-in-Original dated 20.08.2013 and 26.08.2013. Appeals are allowed by way of remand to the learned Commissioner(Appeals).
(Order pronounced in Open Court on 27.03.2026)
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