Madras High Court
M/S.Kone Elevator India Pvt. Ltd vs The Secretary on 2 April, 2013
Author: V.Dhanapalan
Bench: V.Dhanapalan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 02.04.2013 CORAM: THE HONOURABLE MR.JUSTICE V.DHANAPALAN W.P.No.6366 of 2013 and M.P.Nos.1 and 2 of 2013 M/s.Kone Elevator India Pvt. Ltd., No.50, Vanagaram Road, Ayanambakkam, Chennai-600 095. Represented by its Company Secretary .. Petitioner vs. 1. The Secretary Ministry of Finance, Department of Revenue, Government of India, Room No.46, North Block, New Delhi-110 001. 2. Central Board of Excise and Customs Represented by its Chairman, Department of Revenue, Government of India, Room No.46, North Block, New Delhi-110 001. 3. Commissioner of Central Excise Chennai IV Commissionerate MHU Complex, 692, Anna Salai, Nandanam, Chennai-600 035. 4. Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench Shastri Bhavan Annexe 1st Floor, 26, Haddows Road, Chennai-600 006. .. Respondents Writ petition has been filed under Article 226 of the Constitution of India seeking a Writ of Certiorarified Mandamus to quash the impugned order i.e., 4th respondent's final order No.400432013 dated 25.02.2013 in the petitioner's condone delay application No.ST/COD/191/11 in Appeal No.ST/230/2011 and consequently direct the 4th respondent Tribunal to hear the petitioner's stay application No.ST/S/152/11 and Appeal No.ST/230/2011 pending on the file of the 4th respondent/Tribunal. For Petitioner : Mr.Krishnasrinivasan for M/s.S.Ramasubramaniam & Associates For Respondents : Mr.M.Santhanakrishnan SCGSC O R D E R
Heard Mr.Krishna Srinivasan, learned counsel appearing on behalf of M/s.S.Ramasubramaniam & Associates for the petitioner and Mr.M.Santhanakrishnan, learned Senior Central Government Standing Counsel appearing for the respondents.
2. The petitioner-company calls in question an order passed by the 4th respondent in Order No.400432013, dated 25.02.2013 in the petitioner's condone delay application No.ST/COD/191/11 in Appeal No.ST/230/2011, seeking to quash the same and consequently to direct the 4th respondent-CESTAT to hear the petitioner's stay application No.ST/S/152/11 and Appeal No.ST/230/2011 pending on the file of the 4th respondent.
3. The petitioner is a Company engaged in manufacture of Lift components and a registered dealer in Chennai. As part of sales , it also erects, installs, commissions and maintains erected Lifts. While so, there was a show cause notice in S.C.No.64/09 dated 20.03.2009 was issued to the petitioner by the Commissioner of Service Tax, who is an officer of the 2nd respondent. The crux of the Department's case is that the works contracts of the petitioner executed between October 2007 and May 2008 are taxable under Section 65 (105)(zzzza) of the Finance Act, as amended with effect from 01.06.2007. Those works contract involve composite supply of goods as well as services in the course of erection, commission and installation of Lifts by the petitioner at their customers' sites. Service tax is lawfully chargeable only on the service portion of the contract, as it cannot be charged on the supply of goods. The Department's contention in these proceedings is that the petitioner had adopted an unlawful valuation of the service portion of those works contracts. The petitioner has been duly discharging Service Tax liability as per the Tamil Nadu Value Added Tax Act, 2006 (in short 'the TNVAT Act'). As per the TNVAT Act, 85% of the value of the works contracts executed by the petitioner is chargeable to VAT. The petitioner has been duly discharging service tax at the applicable rates on the remaining portion of 15% during the dispute period and relied on Notification No.12/2003 issued by the Department for this purpose. However, the Department refused to accept the valuation of the petitioner stating that the 15% valuation was calculated only on a notional basis derived under the TNVAT Act, which had no relevance under the Finance Act, and therefore, the respondents proceeded further and adjudicated the matter and passed Order-in-Original No.16/2010 S.Tax/Ch.IV, dated 28.09.2010, demanding the petitioner to pay Rs.6,90,60,500/-, as against which, the petitioner moved the appellate authority, namely the CESTAT(R4) in Appeal No.ST/230/2011 and also filed an application for stay and as there is a delay in moving the appeal, an application for condonation of delay petition was also filed. The CESTAT took up the application for condonation of delay to entertain the appeal and on consideration of the same, and on hearing the learned counsel appearing for the parties, and considering the period of limitation due to personal exigency and further period of ailment, for which the medical certificate has been produced, the CESTAT proceeded to allow the Department's Application No.ST/Misc/762/11 in the Impugned Order whereby the name of the respondent in the Appeal was changed, and directed the assessee to mention the correct cause title in further proceedings, even though the appeal was dismissed at the very threshold on account of the delay not being condoned. In sofar the condone delay application filed by the assessee, the CESTAT observed that the medical certificate issued by the skin specialist is mis-conceived and therefore, there is no explanation for the delay after due date and finding that there is no reason to condone the delay in filing the appeal, dismissed the appeal and stay application of the assessee, against which the petitioner is before this Court.
4. On a perusal of the impugned order, it is seen that Order-in-Original has been passed by the original authority on 28.09.2010, as against which, the petitioner has to move an appeal within a period of 90 days (3 months) from the date of its communication and the petitioner has filed an appeal along with a condone delay application to condone the delay of 92 days in filing the appeal. The reason adduced by the petitioner for condonation of delay is that the appeal could not be preferred in time due to ill-health of the General Manager(Taxation) and Company Secretary of the petitioner-company for a short period, during December 2010 and January 2011 and for the said bona-fide reason, they prayed for condonation of delay. They also produced materials before the CESTAT, namely a medical certificate issued by a Dr.S.Krishna, to show that the General Manager was under treatment for Infective Hepatitis and was advised to take complete bed rest from 15.12.2010 to 28.02.2011 and to continue to work only after that period and the said Dr.Krishna is the Petitioner- Company's Doctor who functions daily at the Company's dispensary, as required by law and attends the medical needs of the petitioner-company's workforce. Therefore, the said medical certificate has been considered by the CESTAT which observed that the Doctor in question is a skin specialist and therefore, the medical certificate issued by him for the person suffering from Hepatitis, is mis-conceived and therefore, there is no explanation for condonation of delay and accordingly, the application was dismissed by the CESTAT. When there is sufficient reason put-forth by the petitioner by taking a specific plea in the application for condonation of delay, along with a medical certificate which was issued by a Doctor, it is normal thing to understand that a Doctor who is attached to the petitioner-company has to give medical advise to the employees of the Company and the Certificate has been given for some medical reasons and unfortunately, the CESTAT took a stand that he is only a skin doctor and hence, the medical certificate given by him could not be accepted. The Doctor attached to the petitioner-company gave medical advise to the General Manager and he gives treatment to the employees of the petitioner-company, and he has given a Medical Certificate for taking rest to the General Manager for the ailment of Hepatatis. The CESTAT not being an expert in examining that Certificate, took a view that the said certificate cannot be accepted and therefore, the reasoning given by the CESTAT in dismissing the condonation of delay application is not justifiable.
5. In the light of the above discussion, though the matter requires consideration, in order to avoid a multiplicity of litigation and also taking into necessity of the Revenue to shorten the period of adjudication, this Court feels it proper that the impugned order is unsustinable. Accordingly, the impugned order is set aside and the delay for filing the appeal is condoned and 4th respondent-CESTAT is at liberty to take further course in the appeal filed by the petitioner-assessee.
6. With the above observations and direction, this writ petition is allowed. No costs. Consequently, connected miscellaneous petitions are closed.
ssn To
1. The Secretary Ministry of Finance, Department of Revenue, Government of India, Room No.46, North Block, New Delhi-110 001.
2. Central Board of Excise and Customs Represented by its Chairman, Department of Revenue, Government of India, Room No.46, North Block, New Delhi-110 001.
3. Commissioner of Central Excise Chennai IV Commissionerate MHU Complex, 692, Anna Salai, Nandanam, Chennai-600 035.
4. Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench Shastri Bhavan Annexe 1st Floor, 26, Haddows Road, Chennai 600 006