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2025 (5) TMI 1053 - HC - CustomsCondonation of delay of over 1610 days in filing the appeal - medical condition of the Appellant s Director coupled with the period of COVID-19 pandemic - Goods exported highly over-valued - intention to earn duty drawbacks - limitation period for filing an appeal under Section 129A - HELD THAT - From perusal of the record this Court is of the opinion that there is sufficient cause shown by the Appellant to justify the delay in filing the appeal. However the said delay is being condoned subject to stringent terms and conditions Thus the impugned order is set aside and the appeal is restored to its original position before the CESTAT and shall now be adjudicated on merits. The said amount of Rs. 5 lakhs shall be deposited with the Department by 10th July 2025. The proof of costs shall be furnished before CESTAT. A copy of this order shall be communicated to CESTAT. The appeal is disposed of in these terms. Pending applications if any are also disposed of.
The core legal questions considered in this judgment revolve around the issue of delay in filing an appeal under the Customs Act, 1962, specifically under Section 129A, and whether sufficient cause has been shown to condone such delay. The key issues presented and considered include:
Issue-wise Detailed Analysis 1. Delay in Filing Appeal and Sufficient Cause for Condonation Relevant legal framework and precedents: The limitation period for filing an appeal under Section 129A of the Customs Act, 1962 is three months from the date of receipt of the order. Section 129A(5) permits the condonation of delay if sufficient cause is shown. The Supreme Court's guidance in the context of the COVID-19 pandemic, notably in the suo moto writ appeal concerning extension of limitation, is also relevant. Court's interpretation and reasoning: The Court noted that the appeal was filed after a delay of 1610 days, which is substantial. Ordinarily, such a delay would be fatal to the appeal. However, the Court considered three significant factors that could justify the delay: the ongoing investigations by the Directorate of Revenue Intelligence and Enforcement Directorate culminating in the appellant director's arrest; the COVID-19 pandemic and its impact on limitation periods; and the medical condition of the appellant director. Key evidence and findings: The appellant submitted medical records and highlighted the director's deteriorating health and custodial status, which allegedly prevented timely filing. The respondent contested the sufficiency of medical evidence prior to 2020. The Court found that some medical records were placed on record and accepted the pandemic as a valid extraordinary circumstance. Application of law to facts: The Court applied the principle that delay caused by extraordinary circumstances such as pandemic lockdowns and serious health issues may constitute sufficient cause. The arrest and custodial status of the director, coupled with medical issues and pandemic disruptions, were held to justify the delay. Treatment of competing arguments: While the respondent argued the absence of adequate medical evidence and the appellant's substantial financial gains from the alleged transactions, the Court balanced these against the extraordinary circumstances and accepted the appellant's explanation as sufficient cause. Conclusion: The Court concluded that sufficient cause was shown to condone the delay in filing the appeal. 2. Conditions for Condonation and Restoration of Appeal Relevant legal framework: The power to condone delay is discretionary and often subject to conditions to prevent misuse of the process. Courts impose costs and directions to ensure compliance and discourage frivolous delays. Court's interpretation and reasoning: While condoning the delay, the Court imposed stringent conditions to balance the interests of justice and the respondent department. These included a monetary cost of Rs. 5 lakhs to be deposited with the department and a direction against seeking unnecessary adjournments before the CESTAT. Application of law to facts: The conditions were tailored to ensure that the appellant does not unduly prolong the proceedings and that the department is compensated for the delay. Conclusion: The impugned order dismissing the appeal on delay grounds was set aside, and the appeal was restored to its original position for adjudication on merits, subject to the specified conditions. Significant Holdings "The limitation period for filing an appeal under Section 129A of the Customs Act, 1962 is a period of three months. However, Section 129A (5) also provides that if sufficient cause is shown, the delay in filing the appeal can be condoned." "In view of the above position, this Court is of the opinion that there is sufficient cause shown by the Appellant to justify the delay in filing the appeal." "The said delay is being condoned, subject to stringent terms and conditions: (i) The Appellant shall deposit a sum of Rs.5 lakhs as costs with the Respondent-Department. (ii) No unnecessary adjournments shall be taken before CESTAT." Core principles established include the recognition that extraordinary circumstances such as a global pandemic and serious health issues of a key party can constitute sufficient cause to condone delay in filing appeals under the Customs Act. The judgment underscores the discretionary nature of such condonation, balanced by the imposition of costs and procedural safeguards to prevent abuse. Final determinations on each issue are as follows:
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