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TMI Blog2015 (7) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944 (for brevity, "the Act") and directed for confiscation of the seized goods. The adjudicating authority, as the factual matrix would uncurtain, imposed penalty of Rs. 50 lakhs on the proprietor of the firm in exercise of the power under Rule 15 of the Cenvat Credit Rules, 2004. The order passed by the adjudicating Commissioner was received by the concerned jurisdictional Chief Commissioner on 18.7.2011. After receipt of the said order, the Committee of the Chief Commissioners reviewed the same and expressed the opinion that the decision taken by the Commissioner was fallacious inasmuch as he had not imposed penalty under Section 11A(1) which was imposable; and that the Commissioner had overlooked the imposition of penalty on the Manager and Accounts Manager of the respondent firm under Rule 26 of the Central Excise Rules, 2006, which was required in the facts and circumstances of the case. The review order no. 35 of 2011 was issued on 25.10.2011 under Section 35-E(1) of the Act and a direction was issued to the Commissioner to file appropriate application before the Customs Excise and Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me to hold that for filing an appeal before the tribunal or the commissioner (appeal) in terms of sub-section (4) of Section 35-E an order passed by the concerned reviewing authority under Section 35-E (1) or 35E (3) as the case may be, is imperative. The tribunal opined that filing of an application before the tribunal on the basis of the review order issued under Section 35-E (1) or 35 (2) has to be completed within the period of one month from the date of communication of the review order to the adjudicating authority and on that basis posed the question whether the delay in completing the first, that is the issue of order the Committee of Chief Commissioner or the Commissioner under Section 35E (1) of 35 (2) which is to be completed within a period of three months could be condoned by it. It referred to the decision in CCE v. M.M Rubber Co. [1991 (55) ELT 289] specially paragraph 18 and came to hold as follows:- "Thus, the Apex Court in this case has held that power under section 35E is a power of superintendence conferred on a superior authority to ensure that the subordinate officers exercise their powers under the Act correctly and properly and when a time limit is prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... special leave. 8. We have heard Mr. P. S. Patwalia, Learned Additional Solicitor General for Union of India and Dr. G.K. Sarkar, learned counsel for the respondent. 9. It is necessary to state at the beginning that there is no cavil over the factual scenario. Therefore, we are only required to scrutinise in the statutory backdrop and regard being had to the amendments from time to time and the proposition stated in the authority in M.M. Rubber (supra) whether tribunal has jurisdiction to condone the delay in such a circumstance. We need not have to address the extent of delay and sufficiency of the cause stated in the application for condonation of delay, for the centripodal issue that has arisen for consideration in singularity is whether the tribunal has the jurisdiction or authority to condone the delay. 10. To appreciate the controversy, first we shall refer to the legislative history of Sections 35B and 35E of the Act. We shall only note the provisions existing prior to the Finance Act, 1984 and the amendments thereafter made effective from time to time and in this context we shall reproduce the relevant sub-Sections. Prior to the Finance Act, 1984 relevant sub-Sections 3 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uance of an order under sub-section (1) or sub-section (2) the adjudicating authority or the authorized officer makes an application to the Appellate Tribunal or the Collector (Appeals) within a period of three months 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 Collector (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." 12. The amendment that took place vide Finance Act, 1984 the only change that was brought was in sub-section (3) of Section 35E whereby the time limit was reduced to one year from two years, and the rest of the provisions remained the same. Vide the amendments in 1995, the words "Collector of Central Excise" in Section 35B were substituted with "Commissioner of Central Excise"; whereas in Section 35E, the word "Collector" was substituted with "the Commissioner" and in sub-section (1) at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nate to him has passed any decision or order under this Act for the purpose of satisfying himself as to the legality or propriety of any such decision or order and may, by order, direct such authority or any central Excise Officer subordinate to him to apply to the Commissioner (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Commissioner of Central Excise in his order. (3) Every order under sub-section (1) or sub-section (2), as the case may be, shall be made within a period of three months 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 adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on before the tribunal under Section 35E(4) of the Act was in competent. The tribunal accepted the said contention and held that application was not maintainable. 20. Before this Court, it was contended by the revenue that mere writing an order in file kept in the office is no order in the eyes of law and, therefore, limitation would start only from the date of receipt of the order by the revenue. A submission was also canvassed that departmental authorities and the private respondents are to be treated equally as aggrieved persons for the purposes of calculating the time for making the direction under Section 35E(3) of the Act. The Court scanned the anatomy of Section 35 especially Section 35E and proceeded to interpret the words "from the date of decision or order". In that context, the Court referred to number of authorities and proceeded to state thus:- "12. It may be seen therefore, that, if an authority is authorised to exercise a power or do an act affecting the rights of parties, he shall exercise that power within the period of limitation prescribed therefor. The order or decision of such authority comes into force or becomes operative or becomes an effective order or de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision." 21. After so stating, the three-Judge Bench opined that Section 35-E comes under the latter category of an authority exercising its own powers under the Act. It is not correct to equate the Board, as contended by the revenue, to one of the two parties to a quasi-judicial proceeding. The Court further held that the power under Section 35-E is a power of superintendence conferred on a superior authority to ensure that the subordinate officers exercise their powers under the Act correctly and properly and, therefore, it is not correct to equate the Board to one of the two parties to a quasi-judicial proceeding before the Collector and the Board's right under Section 35-E to the exercise of the right of appeal by an aggrieved assessee from an order passed to its prejudice, and, therefore, when a time limit is provided for exercise of such a power, that should be exercised within specified period from the date of the order sought to be reconsidered. After so observing, the Court proceeded to state thus:- "...To hold to the contrary would be inequitable and will also introduce uncertainties into the administration of the Act for the following reason. There appears to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of communication of the decision or the order. This period of three months is identical to the period of three months stipulated in Section 35-B of the Act. It is apt to note that sub-section (4) to Section 35-E of the Act, however, grants right and authorises the adjudicating authority or adjudicating officer to file an appeal within a period of one month from the date of the decision or the order. The provision also stipulates that if such an application is made against the decision or order, the provisions of the Act inclusive of a provision of the sub-section (4) of Section 35 so far as may be shall apply to such applications. We may note with profit that the stipulation as to the applicability of sub-section (4) to Section 35 has always existed. However, its relevance, applicability and importance underwent a change with the amendment made by Finance Act, 2008 prescribing a period of three months. 23. Thus, as per the scheme of the Act, sub-section (4) of Section 35-B(5) of the Act authorises the appellate tribunal to admit an appeal or permit filing of memorandum of cross-objections after expiry of relevant period if the tribunal is satisfied there was sufficient cause fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Finance Act, 2014 wherein it is stipulated that the Board has the power to extend the time for passing an order under sub-sections (1) and (2) by a period of 30 days. We are disposed to think as it is evident that the legislature is aware of the fact that there can be delay in filing of the appeals in spite of the time limit and procedure prescribed in Section 35-E of the Act and, therefore, Section 35-B(4) has been made applicable to the appellants preferred after necessary approval/sanction/direction under Section 35-E of the Act. The reduction of the period has ensured equality and parity between the appeals, one preferred by the assessee and the other preferred by the revenue. The only thing is that the appeal preferred by the revenue has to be after satisfaction of conditions mentioned in Section 35-E of the Act. It is difficult to conceive that after the amendment brought in by the Finance Act, 2008 that the legislative intent is to put the revenue or the State at a disadvantage. It is not the intention of the legislature to deny and prevent the revenue from preferring an appeal which is barred by limitation or the delay in preferring an appeal cannot be condoned even if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) or 35E(2) of the said Act. As regards the appeals by the Department in terms of Section 35E(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 35B(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." 28. In our considered opinion, the analysis made by the Full Bench is correct in view of the opinion expressed by us in the preceding paragraph and accordingly we hold the said view to the correct. We are obliged to note with profit that the members deciding the lis by the impugned order should have kept themselves abreast to the Full Bench decision of the tribunal so that there would not have been two views as regards the same proposition. 29. Resultantly, the appeal is allowed, the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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