Bussan Auto Finance India Pvt. Ltd vs C.C., Delhi I

Arising out of the order in appeal No.90/S.Tax/2013 dated 11.4.2013 passed by the Commissioner of Customs (Appeals), Delhi I.

For approval and signature:

Honble Mr. Justice G. Raghuram, President

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Bussan Auto Finance India Pvt. Ltd. .. Appellant

Vs.

C.C., Delhi I . . Respondent

Appearance:

Present Shri C.N. Nanda, C.A. for the appellant

Present Shri B.B. Sharma, A.R. for the respondent

Coram: Honble Mr. Justice G. Raghuram, President

Final Order No. 51435/2014

Per Justice G. Raghuram:

Heard the Consultant for the appellant and the ld. A.R. for the respondent/Revenue. The facts in issue illustrate gross arbitrariness.

2. The appellant-assessee is registered for providing banking and other financial services, a taxable service under the provisions of Finance Act, 1994. By a letter dated 27.9.2010 (apparently served on the appellant on 1.10.2010), the Assistant Commissioner of Service Tax, New Delhi called upon the appellant to furnish certain documents specified at serial Nos.(i) to (vi) of the said notice and to explain the mode of providing taxable service, on or before 4.10.2010.This letter intimated that any delay in submission of a response would be viewed seriously. On 1.10.2010 the appellant addressed a communication to the Range Officer, office of the Assistant Commissioner, Service Tax, New Delhi seeking 20 days to reply to the notice dated 27.9.2010, since extensive information is required to be furnished and time is required to gather the information.

3. By letter dated 4.10.2010, dispatched on 5.10.2010 (stated to have been received by the appellant on 11.10.2010; the appellants claim of having received this letter on 11.10.2010 is not disputed), the appellant was intimated that since it is time bound matter, extension as required on 1.10.2010 cannot be granted and the appellant should furnish the information within 3 days from the receipt of the letter of the Assistant Commissioner. Three days from 1.10.2010 would be 14.10.2010. 14.10.2010 was a public holiday on account Common Wealth Games, which is again not disputed. However, a show cause notice was issued on 12.10.2010, even before the time for furnishing the information as indicated in the letter dated 4.10.2010 had expired, calling upon the appellant to show cause why penalty be not imposed under Section 77 of the Act, for failure to furnish the information sought by the letter dated 27.9.2010.

4. The appellant in response to the show cause notice pleaded the relevant dates as stated in the preceding paragraphs and pleaded that no case is made out for imposition of penalty under Section 77 of the Act.

5. Without relevant discussion or cogent analysis and even without disputing the claim of the appellant that letter dated 4.10.2010 was received only on 11.10.2010, the Assistant Commissioner passed an order dated 14.10.2013 imposing the penalty of Rs.200/- for each day commencing from the first date after the due date till the date the appellant complied with the demand set out in the letter dated 27.9.2010, for furnishing the information. This order admits that after the show cause notice was issued, the appellant had submitted the relevant documents on 11.10.2010 but nevertheless proceeded to impose the penalty.

6. Aggrieved, the appellant preferred an appeal which was rejected by the Commissioner vide the impugned order dated 11.4.2014.The impugned order rejects the appeal on the ground that the information was not furnished within the further time stipulated in the letter dated 4.10.2010.The impugned order of the Commissioner (Appeals) fails to deal with the date on which extended time was granted to the appellant, vide the letter dated 4.10.2010 and fails to deal with the legality of the show cause notice issued even before time had expired for furnishing information within the extended period.

7. It is axiomatic that exercise of public power should be fair and reasonable and non-arbitrary and cannot be based on whim and fancy. These are the essential elements of delivery of public power. These elements are patently absent in the primary and the appellate order. The impugned order invites invalidation. We accept the invitation and set aside the order. No costs. The appeal is allowed.

8. ROM is disposed of as infructuous since the main appeal is disposed of.

(Justice G. Raghuram)

President

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