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TMI Blog2022 (4) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... o as "the Act") read with Sections 91 and 95 of the Finance (No.2) Act, 2004 and Sections 136 and 140 of the Finance Act, 2007 along with interest under Section 75 of the Act, the petitioner has knocked the doors of this Court invoking provisions of Article 226 of the Constitution of India. 3. The petitioner, M/s. Kirit Kumar K Thaker, a service provider, whose business activity alleged to have fallen within the ambit of "CARGO HANDLING SERVICE" under Section 65(23) read with Section 65(105(zr) of the Act, is said not to have discharged service tax liability for the Financial Years 2011-12, 2012-13, 2013-14 and 2014-15, which fact could be unearthed by conducting inspection at the premises of the petitioner-noticee by the officials of the Central Preventive Unit of Central Excise, Customs & Service Tax, Bhubaneswar-I Commissionerate, Bhubaneswar. Perusal of the Order-in-Original reveals that with effect from 01.07.2012 the service provided by the petitioner has been brought under negative list as defined under section 65B. It is further revealed that in respect of financial year 2011-12, the Assessing Authority has treated the figures of "vehicle rent" disclosed in the Profit & Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ascribed by the Appellate Authority in rejecting the appeal and submitted that plea of hardship would not be relevant factor for waiving the conditions for entertainment of appeal. This apart, inordinate delay without sufficient cause as envisaged under Section 85 of the Act being shown by the appellant-assessee, there is little scope for this Court to intervene in the matter in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India, more so when statute interdicts the discretionary power of the Appellate Authority. 7. This Court proposes to examine both the angles emanating from the rival contentions and submissions. 8. As regards the first issue, the exposition of law with regard to applicable statutory provision on the date of entertainment of appeal has been propounded by this Court in the case of Indian Oil Corporation Vrs. Odisha Sales Tax Tribunal, Cuttack, 2009 (Supp.1) OLR 928 = 109 (2010) CLT 355. This Court succinctly laid down as follows: "22. In view of the above, law can be summarised that if a condition of predeposit is imposed, a party while filing the appeal is bound to meet the requirement of the pre deposit condition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with adjudicating authority the duty demanded or the penalty levied: Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue: Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decides such application within thirty days from the date of its filing. Explanation:- For the purposes of this section duty demanded shall include,- (i) amount determined under Section 11D; (ii) amount of erroneous CENVAT credit tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osit the duty/tax demanded or the penalty levied with the Appellate Authority or the Tribunal; and the application for waiving the deposit also could be preferred. Weighing balance, considering the undue hardship on the part of the assessee- appellant on the one hand and safeguard of the interests of the revenue on the other, the amount of deposit could be waived by the Tribunal or the Appellate Authority by exercising judicial discretion. However such discretion has been curtailed after amendment of Section 35F with effect from 06.08.2014. Substituted Section 35F of the Central Excise Act, 1944 as a matter of rule provided that, 7.5% or 10%, as the case may be, of the tax/duty demanded or penalty levied shall have to be deposited pending the appeal subject to deposit of maximum amount of Rs. 10,00,00,000/-. Thus, by virtue of the substituted Section 35F of the Act, 1944, invariably 92.5% or 90% of tax demanded or duty levied is waived during the pendency of the appeal. 8.6. The Hon'ble Supreme Court in the case of Tecnimont Pvt. Ltd. Vrs. State of Punjab, 2019 SCC OnLine SC 1228 examined the issue that even though Mohammed Kunhi, (1969) 2 SCR 65 = AIR 1969 SC 430 = (1969) 71 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory right and it can be circumscribed by the conditions in the grant... If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of these conditions that the right becomes vested and exercisable to the appellant... The purpose of the section is to act in terrorem to make the people comply with the provisions of law." 8. Similar view has been reiterated by the Hon'ble Apex Court in Anant Mills Co. Ltd. Vrs. State of Gujarat, AIR 1975 SC 1234; and Shyam Kishore & Ors. Vrs. Municipal Corportation of Delhi & Anr., AIR 1992 SC 2279; Gujarat Agro Industries Co. Ltd. Vrs. Municipal Corporation of the City of Ahmedabad & Ors., AIR 1999 SC 1818. In Shyam Kishore (supra) the Hon'ble Supreme Court placed reliance upon its earlier Judgment in Nandlal Vrs. State of Haryana, AIR 1980 SC 2097, wherein it has been held that "right of appeal is a creature of statute and there is no reason why the Legislature, while granting the right, cannot impose conditions for the exercise of such right so long as the conditions are not so onerous as amount to unreasonable restrictions rendering the right almost illusory", the Court cannot interfere. 9. In Bengal Immunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mately it is dismissed. There must be speedy recovery of the amount of tax due to the authority." 8.8. Reference also may be had to recent Judgment being ECGC Limited Vrs. Mukul Shriram EPC JV, 2022 SCC OnLine SC 184 wherein the following observation has been made: "32. The Division Bench of the Madras High Court in Dream Castle v. Union of India, W.P. No. 13431 of 2015 etc. decided on 18.04.2016 dealing with amended Section 35 of the Central Excise Act by Finance Act No. 2 of 2014 held that when the unamended condition gave only a chance or hope for an assessee to get a total waiver at the discretion of the Appellate Authority, the same cannot be equated to a vested right or stated to be retrospective, unless it is definitely shown that the amended condition is more onerous than the unamended condition. It was held as under: "54. Therefore, it is well settled that the right of appeal is a creature of statute and the legislature is well within its competence to impose conditions for the exercise of such a right subject only to the restriction that the conditions so imposed are not so onerous as to amount to unreasonable restrictions rendering the right almost illusory. *** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act requiring deposit of 20% of the tax or interest or both in dispute as a precondition for entertaining an appeal against the order enumerated under Section 77(1) of the OVAT Act does not make the right of appeal illusory and such a condition is within the legislative power of the State Legislature and cannot be held to be unreasonable and violative of Article 14 of the Constitution." 8.10. The Hon'ble Jharkhand High Court at Ranchi has analysed the position in Satya Nand Jha Vrs. Union of India, 2016 SCC OnLine Jhar 2323 = (2017) 2 AIR Jhar R 619 = (2016) 4 JBCJ 392 (HC) in the following lines: "17. By virtue of substituted Section 35F of the Central Excise Act, 1944 the following objects are going to be achieved:- (a) There shall be safeguard of the revenue; (b) Multifariousness of petitions in one or other forum relating to waiver of deposits will completely come to an end; (c) It reduces the discretion of Commissioner (Appeals) or the Tribunal; (d) It balances "undue hardship" and "safeguard of the revenue"; (e) It is beneficial to the assesseeappellants as the Statute itself waives 92.5% or 90% of the duty demanded or penalty levied, as the case may be, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been dispensed with. If the prescribed pre-deposit is not made by the time of entertainment of the appeal, the appeal is liable for rejection. 8.12. This Court has considered the rival submissions and examined the statutory provisions. It is an undisputed position that a right to file an appeal is not an absolute right but a right bestowed by the statute. Thus, such a statutory right of appeal can be made subject to conditions. However, though the right of appeal has been made conditional by Section 35F of the Central Excise Act, 1944, as applicable to Finance Act, 1994, by virtue of Section 85 of Chapter-V of the Finance Act, 1994, it is unambiguously suggested that a party who desires to challenge the Order-in-Original in appeal shall have to deposit in terms of provisions contained in Section 35F of the Central Excise Act. The requirement to make such deposit is to be fulfilled for the purpose of "entertainment of appeal" and not "filing of the appeal". This can only be reasonable interpretation to the above provision which is inconsonance with law laid down by this Court in Indian Oil Corporation Vrs. Odisha Sales Tax Tribunal, Cuttack, 2009 (Supp.1) OLR 928 = 109 (2010) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the appeal. 9.2. The Appellate Authority has assigned reasons to justify that he ceases to have jurisdiction to condone the delay beyond the period specified under Section 85 of the Act. The Appellate Authority has discarded the following reason assigned by the petitioner eliciting the nature of delay in presenting the appeal: "In the instant case, the explanation offered for the abnormal delay of nearly 47 months is that the Service Tax has been paid and the case is made complicated by the Departmental Officers so that the appellant could not understand how to defend the case. From the application for condonation of delay, it appears that the appellant has categorically accepted the receipt of the order. During this 47 months the Appellant has filed other Appeals before this forum. If that is so, the plea that because of lack of experience there was delay does not stand to be reason. In any event, the causes shown for condonation have no acceptable value. Accordingly, I reject the application for condonation of delay in filing the appeal." 9.3. Section 85 of the Act stands thus: "85. Appeals to the Commissioner of Central Excise (Appeals).- (1) Any person aggrieved by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal can be presented within two months from the date of receipt of the Order-in-Original passed by the adjudicating authority under Section 73 relating to service tax, interest or penalty under Chapter-V of the Finance Act, 1994. Proviso thereto unequivocally lays down that in case of delay in presentation of appeal, the discretion of the Commissioner of Central Excise (Appeals) in considering application for condonation of delay is restricted. If the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of two months, he has the jurisdiction to allow it to be presented within a further period of one month. 9.5. In identical setting of provisions of statute that is contained in the statute presently under consideration, the Hon'ble Supreme Court has laid down that Section 5 of the Limitation Act, 1963 has no application where the Legislature has prescribed stipulated outer limit restricting discretion to condone the delay. In the case of Chattisgarh State Electricity Board Vrs. Central Electricity Regulatory Commission, [2010] 4 SCR 680 = (2010) 5 SCC 23 it has been laid down as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l law which here in this case is the Central Excise Act. The nature of the remedy provided therein is such that the legislature intended it to be a complete code by itself which alone should govern the several matters provided by it. If, on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our considered view, that even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent, the nature of those provisions or the nature of the subjectmatter and scheme of the special law exclude their operation. In other words, the applicability of the provisions of the Limitation Act, therefore, is to be judged not from the terms of the Limitation Act but by the provisions of the Central Excise Act relating to filing of reference application to the High Court." 16. In view of the above discussion, we hold that Section 5 of the Limitation Act cannot be invoked by thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d decision after discussing extensively the earlier case law, the Supreme Court explained in para 18 as under: "18 A plain reading of subsection (3) along with the proviso to Section 34 of the 1996 Act, shows that the application for setting aside the award on the grounds mentioned in subsection (2) of Section 34 could be made within three months and the period can only be extended for a further period of thirty days on showing sufficient cause and not thereafter. The use of the words "but not thereafter" in the proviso makes it clear that the extension cannot be beyond thirty days. Even if the benefit of Section 14 of the Limitation Act is given to the respondent, there will still be a delay of 131 days in filing the application. That is beyond the strict timelines prescribed in sub section (3) read along with the proviso to Section 34 of the 1996 Act. The delay of 131 days cannot be condoned. To do so, as the High Court did, is to breach a clear statutory mandate." 12. The language of the provision is abundantly clear and does not admit of any ambiguity. There is no question of entertaining the petitions of the District Judge beyond the 120 days period. ***" 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trictions except the territorial restrictions which are expressly provided in the Articles. But the exercise of the jurisdiction is discretionary: it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self imposed limitations. Resort that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a writ under Article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy. Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move ano ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hered to. The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspapers Ltd. (1919 AC 368) and has been reaffirmed by the Privy Council in AttorneyGeneral of Trinidad and Tobago v. Gordon Grant & Co. Ltd. (1935 AC 532) and Secretary of State v. Mask & Co. (AIR 1940 PC 105). It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine.' 18. In the subsequent decision in Mafatlal Industries Ltd. & Ors. vs. Union of India & Ors. (1997) 5 SCC 536, this Court went on to observe that an Act cannot bar and curtail remedy under Article 226 or 32 of the Constitution. The Court, however, added a word of caution and expounded that the constitutional Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise its jurisdiction consistent with the provisions of the enactment. To put it differently, the fact that the High Court has wide jurisdiction under Article 226 of the Constitution, does not mean that it can disregard the substantive provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 142 of the Constitution, it is unfathomable as to how the High Court can take a different approach in the matter in reference to Article 226 of the Constitution. The principle underlying the rejection of such argument by this Court would apply on all fours to the exercise of power by the High Court under Article 226 of the Constitution." 9.9. Regard being had to the position of law, on the material available on record that the petitioner having received the Order-in-Original passed under Section 73 of the Act on 09.02.2018, filed the appeal under Section 85 of Chapter-V of Finance Act, 1994 on 10.01.2022, thereby there caused a delay beyond the period of 3 months (i.e., normal period of 2 months + condonable period of 1 month with the discretion of the Appellate Authority), it is held that there is no infirmity found to warrant interference with the Order of the Appellate Authority. The explanation of the petitioner that the delay was on account of the complexities of law could not stay the operation of law of limitation. 9.10. Thus, since the statutory period specified for filing of appeal (2 months + 1 month) had expired long back in May, 2018 itself and the appeal came ..... X X X X Extracts X X X X X X X X Extracts X X X X
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