CESTAT may refuse to admit service tax appeals where tax/penalty below Rs.2 lakhs and no rate/valuation issue involved; additional evidence inadmissible at second appeal to fill earlier lacunae absent due diligence proof.

SANJIV SRIVASTAVA:

This appeal is directed against Order-in-Appeal No.20/ST/APPL/ALLD/2025 dated 15/10/2025 passed by Commissioner (Appeals) Central Excise & Service Tax, . Allahabad

2.1 Appellant for the appellant filed a request for adjournment on the ground that documents are required to obtain from the various government departments. The appeal filed below the tribunal in present case is second appeal. I do not find any reason to entertain such a request for obtaining the documents which were not available at the stage of adjudication or consideration of first appeal. The production of documents is akin to establishing the question of facts and should have been taken up at the earliest stage of proceedings. If production of new documents is permitted at this stage it would be contrary to settled procedure and authority of the appellate remedies. If those documents were not in existence at the time of initiation of proceedings the same should not be allowed to be produced at the second stage of appeal.

2.2 In case of K. R. Mohan Reddy Vs. Net Work Inc. [(2007) 14 SCC 257] Hon’ble Supreme Court after referring to earlier decisions in State of Gujarat Vs. Mahendra Kumar Parshottambhai Desai (dead) by L.Rs. [AIR 2006 SC 1864] & Municipal Corporation of Greater Bombay Vs. Lal Pancham and others [AIR 1965 SC 1008], observed as follows:

“15. The High Court, unfortunately did not enter into the said questions at all. As indicated hereinbefore, the High Court proceeded on the basis as if Clause(b) of Sub¬rule (1) of Rule 27 of Order XLI of CPC was applicable.

16. It is now a trite law that the conditions precedent for application of Clause (aa) of Sub-rule (1) of Rule 27 of Order XLI is different from that of Clause (b). In the event the former is to be applied, it would be for the applicant to show that the ingredients or conditions precedent mentioned therein are satisfied. On the other hand Clause(b) to Sub-rule (1) of Rule 27 of Order XLI of CPC is to be taken recourse to, the appellate Court was bound to consider the entire evidences on record and come to an independent finding for arriving at a just decision; adduction of additional evidence as has been prayed by the appellant was necessary.

17. The fact that the High Court failed to do so, in our opinion, amounts to misdirection in law. Furthermore, if the High Court is correct in its view that the plaintiff respondent had proceeded on the basis that the suit in its entirely based on a cheque, wherefor, it was not necessary for it to file the books of accounts before the trial Court, finding contrary thereto could not have been arrived at that the same was in fact required to be proved so as to enable the appellate Court to arrive at a just conclusion.

18. The Supreme Court in State of Gujarat v. Mahendra Kumar Parshottambhai Desai(dead) by L.Rs. AIR 2006 SC 1864 relying upon Municipal Corporation of Greater Bombay v. Lal Pancham and Ors., held as under:

Though the appellate Court has the power to allow a document to be produced and a witness to be examined under Order XLI Rule 27 CPC, the requirement of the said Court must be limited to those cases where it found it necessary to obtain such evidence for enabling it to pronounce judgment. This provision did not entitle the appellate court to let in fresh evidence at the appellate stage where even without such evidence it can pronounce judgment in the case. It does not entitle the appellate court to let in fresh evidence only for purposes of pronouncement of judgment in a particular way.

19. Appellate Court should not pass an order so as to patch up the weakness of the evidence of the unsuccessful party before the trial Court, but it will be different if the Court itself require the evidence to do justice between the parties. The ability to pronounce judgment is to be understood as the ability to pronounce judgment satisfactorily to the mind of the Court. But mere difficulty is not sufficient to issue such direction. While saying so,