TMI Blog2010 (8) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent. [Order per: Justice R.M.S. Khandeparkar, President]. - Heard the ld. Jt. CDR for the appellant and ld. Advocate for the respondent. 2. The matter has been referred to this Bench for consideration of the following points:- Whether the Tribunal has no power to condone the delay in cases where the appeal is filed either beyond the period of one month from the date of communication of the decision of the Committee or when the committee takes decision under section 35E (1) or (2) beyond the period of 3 months? 3. The ld. Representative of the Department taking us through the provisions of law comprised under section 35 B and 35E and placing reliance in the decision of the Apex Court in the matter of Collector of Central Excise Vs. M.M. Rubber Co. reported in 1991 (55) ELT 289 (S.C.) and of the Larger Bench of the Bombay High Court in the matter of Commissioner of Income-tax vs. Velingkar Brothers reported in 2007 (109) Bom. L.R. 368 as also decision of the Division Bench of Gujarat High Court in the matter of Commissioner of Central Excise and Customs, Surat-I vs. Shree Ganesh Dyeing Printing Works reported in 2008 (238) ELT 775(Guj.) submitted that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 35E (4) of the Act. 6. As regards the jurisdiction of the Tribunal to entertain the appeal in relation to the orders passed under the said Act are concerned, the relevant provision is comprised under Section 35B of the said Act. Sub-Section (3) thereof provides the period of limitation for filing such appeal. Sub-Section (4) deals with the subject of cross objections. Sub-Section (5) deals with the power of the Tribunal to condone the delay in filing the appeal or cross-objection. 7. Obviously, therefore, while considering the point referred for the decision, it would be necessary to bear in mind the following provisions of law:- (A) Section 35B (3) (4) (5) of the said Act read as under:- 35B Appeals to the Appellate Tribunal:- (3) Every appeal under this section shall be filed within three months from the date on which the order sought to be appealed against is communicated to the Commissioner of Central Excise , or, as the case may be, the other party preferring the appeal. (4) On receipt of notice that an appeal has been preferred under this section, the party against whom the appeal has been preferred may, notwithstanding that he may not have appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onths from the date of communication of the decision or order of the adjudicating authority. (4) Where in pursuance of an order under sub-section (1) or sub-section (2) the adjudicating authority or the authorised officer makes an application to the Appellate Tribunal or the Commissioner (Appeals) within a period of [one month from the date of communication of the order under sub-section (1) or sub-section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of sub-section (4) of section 35B shall, so far as may be, apply to such application. 8. Perusal of section 35 E would apparently disclose that the order which is spoken of either under sub-section (1) and sub-section (2) relates to formation of opinion about legality or propriety of the decision or order passed by the adjudicating authority, with a view to ascertain the viability of challenge to such decision or order before the appellate authority. The pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n within the prescribed period. A provision fixing a time limit within which the authority has to act, generally means that the statute considers it reasonable for the authority to act within such period. Normally such provisions regarding the period prescribed for performance of functions are directory. The expiry of such period without performance of the function by the authority will, however, confer no right upon others, nor it will preclude the authority from completing its function, unless the statute expressly or impliedly makes the authority functus officio on expiry of such period or provides for consequences for non-functioning of the authority within specified time. ("Vide: Chet Ram Vashist vs. Municipal Corporation of Delhi AIR 1981 SC 653 = (1980) 4 SCC 647, Bhavnagar University vs. Palitana Sugar Mill Pvt. Ltd. AIR 2003 SC 511 = (2003) 2 SC 111, Balwant Singh vs. Anand Kumar Sharma AIR 2003 SC 1543 = (2003) 3 SC 433, Baru Ram Vs. Smt.Prasanni Others AIR 1959 SC 93 and Sharif-ud-Din vs. Abdul Gani Lone AIR 1980 SC 303 = (1980) 1 SCC 403.) 12. The Statutory Committee Constituted either under sub-section (1) or sub-section (2) of Section 35 E of the said Act is undo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention is devoid of substance. Firstly, there is no application of provision of section 29 (2) of the Limitation Act to the Tribunal in such cases. As far as filing of appeal is concerned, the statutory provision comprised under the said Act prescribes the period of limitation not only for filing the appeal by the assessees but also by the Department. Such provision comprised under section 35 B (5) specifically provides for power to condone the delay in filing the appeals on sufficient cause for the delay is made out. Being so, question of applicability of section 5 of Limitation Act does not arise at all. In this regard, it would be worthwhile to refer to the decision of the Delhi High Court in the matter of Delta Impex vs. Commissioner of Customs (ACU), New Delhi reported in 2004 (173) E.L.T. 449 (Del.) = (2004-TIOL-67-HC-DEL-CUS) . Therein referring to section 128 of the Customs Act 1962, which deals with the subject of appeals to the Commissioner (Appeals) and which prescribes certain period of limitation and further power to condone the delay within prescribed period, the Delhi High Court had observed that "it would be difficult to say that Section 5 of the Limitation Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). Section 35 E makes exception as regards the procedure for filing the Departmental appeals against orders passed by the adjudicating authority. It merely requires scrutiny of the decision of the adjudicating authority before actually preferring the appeal against the same, and that the scrutiny to be by the Committee designated under the said provisions of law. The same is in consonance with the said direction by the Supreme Court in ONGC cases. In such matters the authority has to review the decision of the adjudicating authority to ascertain whether the same is legal and proper and accordingly advise the concerned authority to prefer or not to prefer the appeal against such order. Even in such cases, on such consent being given by the Committee for filing the appeal and if the application pursuant thereto is filed by the Department under Section 35 E (4), the procedure which the Tribunal is required to follow is in terms of section 35 B, 35C 35D of the said Act. The provisions regarding such procedure clearly include power to condone the delay in presenting the appeal within the prescribed period, provided sufficient cause for the same is established. 17. The provisions co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. The period for consideration in case of delay in filing the appeal by the department would be the entire period for form the date of communication of the order to the review committee till the date of filing of application under section 35-E (4) of the said Act. 21. The above conclusion is inevitable in view of section 35 E (4), which specifically provides that pursuant to the filing of the application, consequent to the consent by the Committee, the provisions of the said Act regarding the appeals including the provisions of sub-section (4) of Section 35 B would apply. Power of condonation of delay in filing the appeal has been specifically assured to the Tribunal under sub-section (5) of section 35 B of the said Act. 22. In M.M. Rubber and Co. case, the issue which arose for consideration was as to what was the relevant date for the purpose of calculation of the period of one year provided under section 35 E (3) of the said Act. The matter related to the year 1984. At the relevant time section 35 E (3) of the said Act provided that "No order shall be made under sub-section (1) or sub-section (2) after expiry of one year from the date of the decision or order of the adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the period of three months prescribed under section 35 E (3) of the said Act for the decision by the Committee and one month under sub-section (4) for the application pursuant to the decision to file the appeal. As already observed above the period of three months is to be counted from the date of communication of the decision of the adjudicating authority to the reviewing authority and the period of one month is to be calculated from the date of communication of the order of the reviewing authority. But there is no provision prescribing any specific period for communication of the order of the reviewing committee to the authorised officers directing him to file the appeal. Even if, it is assumed that the same should be at any time after the expiry of the period of three months, there is no outer limit prescribed for the same. But proper reading of sub-section (3) and (4) of section 35 EE would reveal that the total period prescribed is of four months for filing the appeal from the date of communication of the order of the adjudicating authority to the reviewing authority. 25. The decision in Bhushan's case was in relation to the old provision of law and not the law as it st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al petition was received on 16.8.2007. The authorization of the Committee of Commissioners has been recorded on 19.11.2007 and the appeal has been filed in the office of the Tribunal on 20.11.2007. As such, I find that the appeal has been filed on the very next day after the Committee of Commissioners have authorized for filing the appeal. It is evident that there is no delay in processing of the appeal papers and filing the same but there is a delay in the Committee of Commissioners calling for and examining the impugned order and authorizing filing of the appeal against the same. Since the time limit of three months has been prescribed under Section 129A(3) for filing the appeal, it is incumbent on the Committee of Commissioners to form its opinion under Section 129A(2) well before the time limit of three months. In this case, the Committee itself has formed the opinion after a lapse of the appeal period of three months. Such a delay on the part of the Committee of Commissioners, cannot be condoned, which in fact is the reason for late filing of the appeal. The Committee of Commissioners will be well advised to evolve a procedure for periodical and prompt review of orders-in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords "such application". "Such application" should be an application filed by the adjudicating authority within a period of three months from the date of communication of the order passed by the Board. Only an application filed by the adjudicating authority within the said period can satisfy the description "such application" found in clause (4) of Section 35E. When such an application is before the Tribunal, that application is to be heard by the Appellate Tribunal as if it is an appeal against the decision of the adjudicating authority. In deciding that appeal by the appellate authority, clause (4) further states that the provisions of this Act regarding appeals, including the provisions of sub-section (4) of Section 35B shall, so far as may be, apply to such application. But for the specific inclusion of sub-section (4) of Section 35B, no assessee or noticee, who was aggrieved by any part of the order passed by the adjudicating authority, could have filed a cross-appeal. Right of appeal or right to file cross-appeal is to be conferred by statute. In the absence of specific conferment of such a power, no noticee could have filed cross-appeal against the original order in an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by reviewing authority duly. While the first situation requires seeking reasons of delay made by the reviewing authority, the second situation is within the means of the filing authority to explain. Experience shows that in many cases, delay is made in taking decision to file appeal. Few such reasons are as under: (1). Non existence of review committee for not being constituted. (2). Any of the members of the committee suffering from disability or disqualification or ceases to be member thereof for any reason. (3). Dissolution of the committee for any reason. (4). Long absence of any of the members of the committee (5). Vacancy of any of the members caused for any reason or lacking jurisdiction. (6). Delay in constitution of the committee. CONDONATION OF DELAY IS PREMIUM TO THE LAPSE 35. While delay in decision making causes jeopardy to the interest of revenue, there exists no penal provision against the breach of duty made by the reviewing authority to carry out such duty including inaction. Only if sufficient cause is shown preventing Revenue to file its appeal duly, Revenue's Appeal is not made fatal. That is admitted condoning delay in view of certain ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. DELAY CONDONED ENSURING EQUALITY BEFORE LAW 38. Unless litigation is mischievous, remedy shall be undeniable condoning delay. When conduct of appellant on the whole does not warrant castigating him as an irresponsible litigant, power of condonation of delay becomes exercisable. In every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then court normally do not lean against acceptance of the explanation. While condoning the delay, the courts do not forget the opposite party altogether. It is borne in mind that he is a loser and he too would have incurred quite large litigation expenses. It is a salutary guideline that when courts c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n O.P. Kathpalia v. Lakhmir Singh [1984 (4) SCC 66] . The life-purpose for the existence of the institution of Courts is to sub-serves the ends of justice. It is common knowledge that Courts are making a justifiably liberal approach in matters instituted in the Courts. The fact that it is the Union which is seeking condonation and not a private party is altogether irrelevant. The doctrine of equality before law demands that all litigants, including the State as a litigant, are accorded the same treatment and the law is administered in an even-handed manner. There is no warrant for according a step-motherly treatment when the Union is the applicant and delay is condonable. However as has been observed in para 15 of the judgment by Apex court in the case of State of Nagaland V. Lipok AO - 2005 (183) E.L.T. 337 (S.C.) that on account of an impersonal machinery (no one in charge of the matter is directly hit or hurt by the judgment sought to be subjected to appeal) and the inherited bureaucratic methodology imbued with the note-making, file-pushing, and passing-on-the-buck ethos, delay on its part is less difficult to understand though more difficult to approve. The State which represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n table for considerable time causing delay - intentional or otherwise - is a routine. Considerable delay of procedural red-tape in the process of their making decision is a common feature. Therefore, certain amount of latitude is not impermissible. If the appeals brought by the State are lost for such default no person is individually affected but what in the ultimate analysis suffers, is public interest. It was also held by Hon'ble Court that the factors which are peculiar to and characteristic of the functioning of the governmental conditions would be cognizant to and requires adoption of pragmatic approach in justice-oriented process. No separate standards to determine the cause laid by the State vis-a-vis private litigant could be laid to prove strict standards of sufficient cause. UNEXPLAINED DELAY RENDERS REMEDY FATAL 43. When the Special Leave Petition was filed by Customs in the case of Assistant Commissioner of Cus., Mumbai V. Francis Odillo Roezer -2005 (182) E.L.T. 439 (S.C.) that was found to be barred by time by 864 days. Going through the explanation furnished by the petitioner, the Apex Court hardly found any explanation except for giving details of the movemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions in view of the fact that the SLPs filed on behalf of the Union of India are quite often barred by time and the application for condonation of delay is made in a casual and routine manner without indicating facts which would constitute "sufficient cause" to permit condonation of delay in accordance with law. Applications for condonation of delay were rejected and also the Special Leave Petitions were dismissed as time-barred. PUBLIC JUSTICE PREVENTS PUBLIC MISCHIEF 44. It has been noticed by Hon'ble Supreme Court in the case of State of Nagaland V. Lipok AO - 2005 (183) E.L.T. 337 (S.C.) that the Government at appropriate level should constitute legal cells to examine the cases whether any legal principles are involved for decision by the Courts or whether cases require adjustment and should authorise the officers to take a decision or give appropriate permission for settlement. In the event of decision to file appeal needed prompt action should be pursued by the officer responsible to file the appeal and he should be made personally responsible for lapses, if any. Equally, the State cannot be put on the same footing as an individual. The individual would always be quick ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred for consideration is hereby answered as under:- "The Tribunal has ample power to condone the delay in filing the appeal including the one filed under section 35 E (4) of the said Act. The period which can be condoned in relation to filing of the appeal under section 35 E (4) of the said Act would include the period availed by the review committee in terms of section 35 E (1) or 35 E (2) of the said Act. As regards the appeals by the Department in terms of section 35 E (4), the same should be filed within one month from the date of communication of the order under sub-section (1) or sub-section (2) of the said section but not beyond four months from the date of communication of order of the adjudicating authority to the review committee. In case there is any delay in this regard, the same can be condoned in exercise of powers under section 35 B (5), on being satisfied about sufficient cause for such delay and power to condone the delay would include the period availed under section 35E (1) or (2) by the reviewing committee to decide about filing of the appeal." 47. The reference is answered accordingly and the Registry is directed to place the matter before the concer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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