Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Cellulose Products Of India Ltd. on 25 September, 1992
Equivalent citations: 1993(64)ELT65(TRI-DEL)
ORDER K.S. Venkataramani, Member (T)
1. This appeal has been filed by the Collector of Central Excise, Ahmedabad against the order of the Collector of Central Excise (Appeals), Bombay dated 11-6-1986. The facts, in brief, are that the respondents herein, filed a classification list of their products, namely, alginic acid and sodium alginate claiming classification under the then existing Item 68 CET covering "goods not elsewhere specified". On testing of a sample of the product, it was found that the product had a molecular weight of over 3000. The Department was, tentatively of the view that the product would be classifiable under Item 15A(1) CET as plastics and not Item 68. On considering the respondents' explanation, the Assistant Collector found that going by the molecular weight of the product, it cannot be considered as high polymer for being classified under Item 15A(1) CET, and therefore, agreed with the claim of the respondents that the product should be correctly classified under Item 68. This order of the Assistant Collector was dated 16-6-1983. The Collector of Central Excise, Ahmedabad, subsequently, issued a direction under Section 35E(2) of the Central Excises & Salt Act, 1944, to the Assistant Collector to apply before the Collector of Central Excise (Appeals) for reviewing the order of the Assistant Collector. A direction under Section 35E(2) for this purpose was issued by the Collector of Central Excise, Ahmedabad on 27-9-1984. The Collector (Appeals), in his order, held that the application before him under Section 35E(3) succeeded on merits, but failed on the aspect of limitation. This was because the Collector (Appeals) found that the time limit, prescribed under Section 35E(3) for making order under Section 35E(2), though it was two years on the date when the adjudication order was passed, yet it had been reduced to one year by the Finance Act of 1984 which came into force w.e.f. 11-5-1984, and observed that had the Collector passed his order by 15-6-1984, it would have been within the time of one year from the date of Assistant Collector's order. It is against this order when the present appeal has been filed.
1A. Shri Jayaraman, Ld. S.D.R. appearing for the Appellant Collector, argued that the Collector (Appeals) was in error in holding that the application before him under Section 35E(3) was hit by limitation because this Tribunal had gone into this very issue regarding limitation under Section 35E(3) in the case of Collector of Central Excise, Baroda v. Sarabhai Chemicals -1986 (26) E.L.T. 1057 and had held that if the adjudication order sought to be reviewed was dated prior to the amendment which came into effect on 11-5-1984 (which reduced the period from two years to one year) then the limitation of two years was available where the adjudication order was dated prior to 11-5-1984. The Ld. SDR also contended that the amendment reducing the period of limitation was also held to be not retrospective.
1B. Shri Laxmi Kumaran, Ld. Counsel appearing for the respondents, however, contended that the facts relating to the Sarabhai Chemcials case were different and submitted that the Finance Bill became an Act on 11-5-1984 reducing the limitation from two years to one year under Section 35E(3). The Assistant Collector's adjudication order is dated 16-6-1983. The one year period would have expired on 16-6-1984, which means that even after the coming into effect of the amended provisions in May, 1984, the Department still had time till June, 1984 to exercise the powers under Section 35E(2), but actually, in this case the Collector had passed the order only on 27-9-1984. The Ld. Counsel pointed out that in the Sarabhai Chemicals case (supra), the Tribunal had specifically observed that if one were to apply the amended provisions to the facts of that case, then since the Assistant Collector's order in that case was dated 12-1-1983, the one year period would have expired on 11-1-1984 i.e., it would become time-barred even before the amendment took effect from 11-5-1984. Here, such is not the case on facts, according to the Ld. Counsel. He, further, referred to "Statutory Interpretation" by F.A.R. Bennion. He drew attention to page 191 regarding retrospective operation wherein it has been held that in a particular case where the limitation period was reduced by an amending Act that where the new limitation period, if applied to the facts of a case, would have expired before the amending Act was passed and so, it could not be complied with, then the old limitation will apply. The Ld. Counsel pointed out that it was this aspect that had been also noted by the Tribunal in the Sarabhai case. The Ld. Counsel also referred to the "Principles of Statutory Interpretation" by G.P. Singh. The Ld. Counsel drew attention to this passage "When the later Act provides a shorter period of limitation than that provided by the earlier Act, a right of suit, which is subsisting according to the earlier Act on the date when the later Act comes into operation, will not be taken to be extinguished. If there is still time even on the basis of the later Act within which such a suit can be filed, the right has to be availed of within that period, and the benefit of the earlier Act is not available." The above passage is based on the judgment of Calcutta High Court in the case of Mohd. Saleh v. Chandra Kumar -AIR 1930 Cal. 34. The Ld. Counsel also relied upon Allahabad High Court in the case of Khem Chand Keshrimal v. Commissioner of Sales Tax -1967 Vol. 19 STC 71. That was a case where under the U.P. Sales-tax Act prior to 1-4-1954, there was no period of limitation for preferring a revision application. On 1-4-1954, Act was amended after which the revision application had to be filed within one year from the date of service of the order. An Assessment Order was passed on 13-10-1953 and a copy of the order was received by the assessee on 1-1-1954. The assessee filed a revision application on 12-9-1955, which was rejected as barred by limitation. On a reference, the High Court held that the revision application was barred by limitation, which means, in the facts of that case, the new law was applied.
On hearing the submissions made by the Ld. S.D.R. and the Ld. Counsel, the issue was closed for orders on the question of limitation as argued before us. It is seen that in the case of Collector of Central Excise v. Sarabhai Chemicals (supra), the Tribunal had followed the ratio of the Supreme Court decision in the case of Garikapati Veeraya v. N. Subbiah Choudhary - AIR 1957 S.C. 540. Para 23 thereof is reproduced below :
"(23) From the decisions cited above the following principles clearly emerge :
(i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.
(ii) The right of appeal is not a mere matter of procedure but is a substantive right.
(iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit.
(iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal.
(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise"
(Emphasis added) This has been reaffirmed by the Hon'ble Supreme Court in the case of Dayawati and Anr. v. Inderjit and Ors., reported in AIR 1966 SC 1423, as seen from the following extract:
"(11) Section 6 of the Relief of Indebtedness Act is clearly retrospective. Indeed, the heading of the section clearly shows that it lays down the retrospective effect. This being so, the core of the problem really is whether the suit could be said to be pending on June 8,1956 when only an appeal from the judgment in the suit was pending. This requires the consideration whether the word 'suit' includes an appeal from the judgment in the suit. An appeal has been said to be 'the right of entering a superior Court, and invoking its aid and interposition to redress the error of the Court below.' (per Lord Westbury in Attorney-General v. Sillem, (1864) 11 ER 1200 at p. 1209). The only difference between a suit and an appeal is this that an appeal "only reviews and corrects the proceedings in a cause already constituted but does not create the cause." As it is intended to interfere in the cause by its means, it is a part of it, and in connection with some matters and some statutes, it is said that an appeal is a continuation of a suit."
(Emphasis added) The Tribunal, on the basis of the above decision of the Supreme Court, had clearly held that "On the other hand, the Supreme Court decision in AIR 1957 SC 540 has clearly laid down that right of appeal is vested right and that this right can be taken away only by a subsequent enactment if it so provides expressly or by necessary intendment and not otherwise. In the same judgment, the well-known principle has also been referred to the effect that statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested...."
The amended provision came into effect from 11-5-1984 and in this case since the order which is sought to be reviewed was passed on 12-1-1983 being prior to 11-5-1984 cannot be held to be hit by time bar in the absence of an express provision in the amending enactment giving the amendment retrospective effect." Therefore, basically, the Tribunal in Sarabhai case had applied the ratio of the Supreme Court as above. It was only as a further reasoning that the Tribunal had also found that in the facts of that case that the one year period of limitation if applied, would have expired, before the amending provisions came into effect. The Calcutta High Court decision in the case of Khoivdker Mohd Saleh v. Chandra Kumar Mukherji - AIR 1930 Cal. 34 relied upon by the Ld. Counsel is not on all fours with facts of the present case. Firstly, the court there was dealing with applicability of limitation under Limitation Act, 1908. That was an Act with a breathing period incorporated at the time of its commencement. It was passed in August 1908 and was to come into effect on 1-1-1909. Secondly, the court also found on the facts of that case that the plaintiff had two years and nine months under the new law within which he could make his application; whereas the time available in the present case is hardly two months after the amendment came into effect. Thirdly, in that decision, itself, the Calcutta High Court had noted the precedent judicial decisions that a right of appeal is a substantive right which could not be taken away without an express provision for it, and observed, "Those cases dealt with a substantive right and not with a question of procedure such as limitation of suits and have no bearing on the question before us." The Sales Tax case in the case of Khem Chand Kesri Mal cited by the respondents may not be comparable factually with the present case. In that decision, the High Court had considered a case where the petitioner had not filed any appeal but preferred a revision application and in this context the court was considering whether the right to apply for revision of assessment order, was a vested right or not and observed that the making of an assessment order is not a transaction or consideration giving rise to a right and that assessing a dealer to sales tax does not confer any right upon him and held that, therefore, it cannot be said that the amendment Act takes away or impairs a vested right acquired. Factually, also the time available for the petitioner therein, under the new law, was nearly nine months and the court observed, "actually, the Amendment Act was passed so much before the expiry of one year from the date of service of the order upon the assessee that it could hardly make a grievance of the shortening of the period and contend that it was not left with sufficient time for applying for revision". The Court also oberved "Revisional jurisdiction is notoriously discretionary; there is no right to get an order revised as there is a right to get an order corrected on appeal. Instituting a suit and instituting an appeal are matters of right but not applying for revision." On the other hand in the present case, the power of review under Section 35E(2) Central Excises & Salt Act, 1944 and the application filed under Section 35E(4) in pursuance of a direction under Section 35E(2), thereunder, is a deemed statutory appeal, and the right of appeal, it is well settled, is a vested right. Such a right cannot be taken away by an amendment unless that amendment expressly indicates its retrospective effect. The Tribunal has already found that the amendment reducing the period of limitation under Section 35E(3) brought about on 11-5-1984 did not have any retrospective effect. In such a view of the matter, it is held, following the ratio of the Sarabhai Chemicals case (supra), that the time limit available to the Collector under Section 35E(2) Central Excises & Salt Act, 1944 for applying for review of an adjudication order of the Assistant Collector which is 16-6-1983 being prior to 11-5-1984, the time limit will be two years from the date of adjudication order.
Therefore, it is held that the Collector (Appeals) was in error in dismissing the application before him on grounds of limitation.
S.L. Peeran, Member (J) 1C. I have gone through the draft order prepared by my learned brother Shri K.S. Venkataramani, Member (Tech.) but I could not persuade myself to agree to the same.
2. The Collector (Appeals) has held in the impugned order on the question of limitation as follows -
"However, I agree with the respondents' arguments that under Section 35E(2) no order under Sub-section (2) could be made by the Collector of Central Excise after the expiry of one year from the date of the decision or order of the adjudicating authority. In this particular case the Adjudicating authority issued his order on 16-6-1983 and the Collector of Central Excise, Ahmedabad passed his order on 27-9-1984 under Section 35E(2) read with Sub-section 35E(4) on 27-9-1984. The limit prescribed in the Section 35(3) for making order under Section 35E(2) though it was two years on the date when the Adjudication order was passed, but this time limit was reduced to one year by Section 49 of the Finance Act, 1984 which came into force w.e.f. 11-5-1984. Had the Collector passed his order by 15-6-1984, it would have been within time of one year.
The Hon'ble Tribunal in the case of Ashoka Foundry Dhanbad v. Collector of Central Excise, Putna [1987 (31) E.L.T. 521 (Tri.)] has held in para 10 of the said order as follows -
"The show cause notice to the appellants is dated 27/29-4-1982. The order of the Asstt. Collector as reproduced in the communication of the Supdtt. dated 29-4-1981 is dated 20-4-1981. Under Sub-section (4) of Section 35A of the Act extracted above, it would be seen that the review proceedings could not be commenced after expiry of period of one year from the date of Asstt. Collector's decision. The proceedings must, therefore, be held to be time-barred".
The Hon'ble Tribunal in the case of Atma Steel Pvt. Ltd. v. Collector of Central Excise, Chandigarh and Ors. [1984 (17) E.L.T. 331 (Tribunal)] have held in para 101(c) and (d) as follows -
"(c) The proceedings initiated with reference to a rule or provision validly subsisting at the time of initiation of proceedings can continue in spite of repeal or substitution of the original provision;
(d) Recourse can be had to the provisions as prevailing at the time of initiation of proceedings, and the period available would be the one as permissible under the provisions existing at the time of issuance of show cause notice, in spite of the fact that the short-levy or non-levy refers to the period when different period of limitation was available".
In view of the above, the application under Section 35E succeeds on merits, but fails on the issue of time-bar. Application filed by the Asstt. Collector is rejected accordingly."
3. The above view of the Collector (Appeals) is correct, The amendment has come into effect from 11-5-1984. As on this date, the time of one year from the date of Asstt. Collector's order had not been completed. It was passed on 16-6-1983. The Collector of Central Excise, Ahmedabad had still 35 days with him to pass the order and save the prescribed time of one year under the amended section. In case the Finance Act had come irito effect after one year of Assistant Collector's order i.e. any day subsequent to 17-6-1984, then it could have been held that the Statute will not have retrospective effect, to take away the right of two years. As, in such an event, the Collector who was under the impression that the time available under the Statute being two years, after a lapse of one year, would be suddenly confronted with the new legislation reducing the period to one year. This situation would certainly cause hardship to litigant and in this context, the Supreme Court held in the case of Garikapati Veeraya v. N. Subbiah Choudhary (AIR 1957 SC 540) that the right of appeal is vested right and that this right can be taken away only by a subsequent enactment if it so provides expressly or by necessary intendment and not otherwise. The Supreme Court further held that Statutes are not to be held to act retrospectively unless a clear intention to that effect is manifested. In the present case, the amended provision is not being applied retrospectively. As on the date of amendment, the one year period from the Asstt. Collector's order had not run out and there was still ample time available to file the appeal, which the Collector did not do. The amended section of one year will be effective in all force. The ruling of the Supreme Court as rendered in Garikapati Veeraya's case and that of Tribunal as rendered in the case of Sarabhai Chemicals (supra) is clearly distinguishable.
4. Shri V. Lakshmi Kumaran, Advocate for the respondents, relied on the following passage appearing at pages 349 and 350 of Principles of Statutory Interpretation by Guru Prasanna Singh, Chief Justice, High Court of Madhya Pradesh, Third Edition 1983, Bharat Law House, which clarifies the view taken by me -
"(d) Statutes of Limitation -
Statutes of limitation are regarded as procedural and the law of limitation which applies to a suit is the law in force at the date of the institution of the suit irrespective of the date of accrual of the cause of action.
[C. Beepathuma v. V. Shankaranarayanan - AIR 1965 SC 241 p. 245; Shahidganj (Masjid) v. SGP Committee - AIR 1940 PC 116 p. 121; Sonilal v. Kanhaiyalal, 19 IC 291 (PC) C 294 (Suit instituted when Act XV of 1877 was in force; acknowedgement relied upon to extend limitation made when earlier Act was in force; held Act XV of 1877 applied to the suit and acknowledgement to be effective to extend limitation must conform to Section 19 of that Act); See further Mt. Allah Rakhi v. Shah Mohammad, AIR 1934 PC 77 p. 78 (pending proceedings are not affected by a change in the law of limitation) See further, Ramprajad v. Vijay Kumar - AIR 1967 SC 278 p. 283 (para 13)].
The object of a statute of limitation is not to create any right but to prescribe periods within which legal proceedings may be instituted for enforcement of rights which exist under the substantive law. But, after expiry of the period of limitation, the right of suit comes to an end and, therefore, if a particular right of action had become barred under an earlier Limitation Act, the right is not revived by a later Limitation Act even if it provides a larger period limitation than that provided by the earlier Act. On the same principle, if right to execute a decree or judgment gets barred under an earlier Act, the right is not revived by a later Act. When the later Act provides a shorter period of limitation than that provided by the earlier Act, a right of suit, which is subsisting according to the earlier Act on the date when the later Act comes into operation, will not be taken to be extinguished. If there is still time even on the basis of the later Act within which such a suit can be filed, the right has to be availed of within that period, and the benefit of the earlier Act is not available.
(Gopaldas v. Tribhawan - AIR 1921 Bom. 40; Begum Sultan v. Salvi Begum - AIR 1926 All. 93; Mohammad Saleh v. Chandra Kumar - AIR 1930 Cal. 34).
But if the shorter period provided in the later Act had already expired on the date of its enforcement, the suit can be filed within the period provided under the earlier Act, otherwise the effect of the later Act would be to extinguish a subsisting right of suit, an inference which cannot be reached except from express enactment or necessary implication. To avoid these complications when a later Limitation Act enacts shorter periods, it is usual to postpone its coming into effect for some reasonable time, or to make provision for a time gap within which the benefit of the earlier Act can be taken. Statutes of Limitation are thus retrospective in so far as they apply to all legal proceedings brought after their operation for enforcing causes of action accrued earlier, but they are prospective in the sease that they neither have the effect of reviving a right of action which is already barred on the date of their coming into operation nor do they have the effect of extinguishing a right of action subsisting on that date. But a statute may, expressly or impliedly by retrospectively extending limitation, revive a barred claim".
5. The view expressed by Allahabad High Court in Khem Chand Keshrimal's case (supra) and that of the Calcutta High Court in the case of Khondhar Mohamed Saleh's case (supra) is still a good law and the Supreme Court ruling rendered in the case of Garikapati Veeraya's case is not in conflict with it. My view is also supported by another ruling of the Bench rendered in the case of Collector of Central Excise v. M.M. Rubber & Co., reported in 1990 (50) E.L.T. 387 (T).
6. In view of my findings, I agree with the reasoning given by the Collector (Appeals) in the impugned order regarding limitation and accept the respondents' arguments in support thereof and order for dismissing this appeal as not maintainable. Appeal dismissed.
K.S. Venkataramani
7. In view of the separate order recorded by the two Members, the following point of difference has arisen :
Whether for the purposes of limitation for an application under Section 35E(3) of Central Excises & Salt Act, 1944 after its amendment in 1984 shortening the period of limitation from two years to one year, if there is still time available even on the basis of the amended period of limitation within which such an application can be filed, the right has to be exercised within that period and whether the benefit of the earlier longer period of limitation prior to the amendment is not available. The point of difference is referred to the President in terms of Section 129C(5) of Customs Act, 1962 as made applicable to Central Excises & Salt Act, 1944.
Sd/- Sd/- (K.S. Venkataramani) (S.L. PEERAN) Member (T) Member (Judicial) 23-4-1991 Misc. Order No. 155/92-C G.P. Agarwal, Member (J)
8. The aforesaid point of difference has been referred to me for determination by the Hon'ble President of the Tribunal in terms of Section 129C(5) of the Customs Act.
9. Heard both sides.
10. Arguing on behalf of the appellants, Shri S.K. Roy, learned SDR, while supporting the Order proposed by the learned Technical Member, Shri K.S. Venkataramani, laid much reliance on the case of Collector of Central Excise, Baroda v. Sarabhai Chemicals, 1986 (26) E.L.T. 1057. Countering the contentions raised by the learned SDR, Shri V. Lakshmikumaran, learned Counsel for the respondents, while supporting the Order proposed by the learned Judicial Member, Shri S.L. Peeran, drew my attention to certain principles of interpretation, as stated by Mr. F. A.R. Bennion, in his book entitled "STATUTORY INTERPRETATION" 1984 Edition - Pages 443-451 and by Shri G.P. Singh in his book "PRINCIPLES OF STATUTORY INTERPRETATION", Third Edition, 1983 -Pages 349-359. He also took me through the provisions of Section 35 of the Central Excises and Salt Act, 1944 which deal with "Appeals" to Collector (Appeals) vis-a-vis the provisions of Section 35B(2) & (4) which deal with "Appeals to the Appellate Tribunal" of the Act, to emphasise the point that under the scheme of the Act, all appeals fall under Chapter VIA (Section 35-36) of the Act which includes reference application also (See Section 35G, 35H, 351). He also cited the case of State of Travancore, Cochin v. Shanmugha Vilas Cashewnut Factory, AIR 1953 SC 333, followed in Bangladesh Community v. State of Bihar, AIR 1955 SC 661, to explain as to what the legal position is? In his rejoinder, Shri Roy, learned SDR, submitted that there should be harmonised construction of the parallel provisions appearing in the Act.
11. Before I advert myself to the submissions made by both sides, it would be advantageous to mention that while reducing the period of limitation from two years to one year in Sub-section (3) of Section 35E by the Finance Act, 1984 (21 of 1984) which came into force on 11-5-1984, no saving clause was enacted on, the lines of Section 30 of the Indian Limitation Act, 1963. In this background the moot question which arises for my consideration is : what is the effect where the cause of action had accrued and the period of limitation has not expired under the old Section 35E(3) before the commencement of the amended Section but the period of limitation has been reduced in the amended Section.
12. My learned brother, Shri K.S. Venkataramani, Technical Member, has taken a view in his proposed Order that the amended provision reducing the period from two years to one year cannot have a retrospective effect since the right of appeal is a vested right which cannot be taken away by an amendment unless that amendment expressly indicates its retrospective effect, whereas my other learned Judicial Brother, Shri S.L. Peeran, has taken a view that since the period of 35 days was still available to the Collector of Central Excise, Ahmedabad, to pass the Order when the amended Section 35E(3) came into force on 11-5-1984 to exercise his powers under Sub-section (2) of Section 35E, direction given in the instant case to file the present appeal was time-barred being hit by the period of limitation of one year prescribed in the amended Section 35E(3) of the Act.
13. After going through the entire case law referred to in the proposed orders prepared by my learned brothers and the case law cited before me including the principles of statutory interpretations as culled out by the two eminent jurists, namely, S/Shri G.P. Singh and F.A.R. Bennion in their books "PRINCIPLES of STATUTORY INTERPRETATION" and "STATUTORY INTERPRETATION" respectively, the following principles emerge out :-
(i) Statutes of limitation are regarded as procedural and the law of limitation which applies to a suit is the law in force at the date of the institution of the suit irrespective of the date of accrual of the cause of action;
(ii) Every procedural law is retrospective in operation. The reasons are that the general rule that a statute is prima facie prospective and that no retrospective effect is to be given to it unless by express words or necessary implication it appears that this was the intention of the Legislature does not apply to a statute concerned with matters of procedure. A procedural law is to be given retrospective effect in the absence of a clear indication that it was not the intention of the Legislature.
(iii) Retroactive operation of a statute is looked upon with disfavour if it takes away or impairs vested rights under existing laws and is, therefore, considered unjust or oppressive. But this reason does not apply in the case of a procedural law.
(iv) There is a distinction between a right and pursuing a remedy against an infringement of, or threat to, a right. The existence and the nature of a right are governed by what is known as substantive law and pursuing the remedy, by what is known as adjective law. All procedural law, such as that contained in the Codes of Procedure, the Limitation Act, the Court Fees Act, the Suits Valuation Act, etc. is adjective law. The law of limitation is concerned with pursuing the remedy and not with the existence or nature of the right or even of the remedy. Even when it contains a provision (such as that, of Section 27 of the Indian Limitation Act, 1963) for extinction of a right on the lapse of certain time that provision may be treated as substantive law but the other provision prescribing the period of limitation remains procedural law. The rules of limitation are rules of procedure and do not create any right in favour of any person, nor define or create causes of action but merely prescribe the period within which the remedy can be exercised. As soon as a cause of action accrues the right vests in the aggrieved party to file a suit and to carry it on in the appellate Court in the event of his failure in the trial Court. But this is all the right that he has; he has no vested right either in the procedure to be followed by the Court when he institutes a suit or an appeal or the period of limitation prescribed for the institution of a suit or an appeal. There is no vested right in a remedy.
14. It may also be stated here that after the closure of the case for orders by me, the learned counsel for the appellants forwarded a copy of the judgment delivered by the Apex Court in the case of Vinod Gurudas Raikar v. National Insurance, 1991 (2) SCALE 493, wherein the Apex Court reiterated the same view observing that a law which is procedural in nature, and does not affect the rights, has to be held to be retrospectively applicable. In that case the appellant was injured in a road accident and his claim petition was dismissed as being barred by limitation. The accident took place on 22-1-1989. The Motor Vehicles Act, 1939 was repealed by Section 217(1) of the Motor Vehicles Act, 1988 which came into force on 1-7-1989. The period of limitation for filing a claim petition both under the old Act and the new Act being six months expired on 22-7-1989 The claim petition of the appellants, however, was filed belatedly on 15-3-1990 with a prayer for condonation of delay. The Accident Claims Tribunal held that in view of the provisions of Sub-section (3) of Section 166 of the new MotorVehicles Act, the delay of more than six months could not be condoned. It was contended by the claimant that since the accident took place when the old Motor Vehicles Act was in force, the proceeding before the Accident Claims Tribunal must be held to be governed by the old Act, and his petition cannot be dismissed on the basis of the provisions in the new Act. Repelling the contention the Apex Court held that the claim to compensation which the claimant was entitled to, by reason of the accident was certainly enforceable as a right but so far as the period of limitation for commencing a legal proceeding is concerned, it is adjectival in nature and has to be governed by the new Act.
15. However, to the principle that procedural law is retrospective in operation and since the law of limitation is procedural law it starts applying; at once in the absence of words to the contrary and a proceeding is governed by the law of limitation in force at the time of its institution and not by the previous law of limitation that might have existed at the time of accrual of the cause of action for it, there are certain exceptions. The new law of limitation providing a longer period cannot in the absence of express words revive a dead remedy. Nor can it suddenly extinguish a vested right of action by providing for a shorter period of limitation. In fact, this has been said so by the Apex Court in the aforesaid case of Vinod Gurudas Raikar v. National Insurance, supra, wherein relying upon the case of New India Insurance v. Shanti Misra, 1976 SCR 266, the Court observed that:
"The claim to compensation which the appellant was entitled to, by reason of the accident was certainly enforceable as a right. So far the period of limitation for commencing a legal proceeding is concerned, it is adjectival in nature, and has to be governed by the new Act - subject to two conditions. If under the repealing Act the remedy suddenly stands barred as a result of a shorter period of limitation, the same cannot be held to govern the case, otherwise the result will be to deprive the suitor of an accrued right. The second exception is where the new enactment leaves the claimant with such a short period for commencing the legal proceeding so as to make it unpractical for him to avail of the remedy. This principle has been followed by this Court in many cases and by way of illustration we would like to mention New India Insurance Co. Ltd. v. Smt. Shanti Misra -1976 (2) SCR 266. The husband of the respondent in that case died in an accident in 1966. A period of two years was available to the respondent for instituting a suit for recovery of damages. In March, 1967 the Claims Tribunal under Section 110 of the Motor Vehicles Act, 1939 was constituted, barring the jurisdiction of the civil court and prescribing 60 days as the period of limitation. The respondent filed the application in July, 1967. It was held that not having filed a suit before March, 1967 the only remedy of the respondent was by way of an application before the Tribunal. So far the period of limitation providing for a shorter period cannot certainly extinguish a vested right of action. In view of the change of the law it was held that the application could be filed within a reasonable time after the constitution of the Tribunal; and, that the time of about four months taken by the respondent in approaching the Tribunal after its constitution, could be held to be either reasonable time or the delay of about two months could be condoned under the proviso to Section 110A(3)."
(Emphasis Mine) See also the case of Rajasthan Worsted Spinning Mills v. Collector of Central Excise, Jaipur, 1990 (47) E.L.T. 483 (Tri.) decided by a Larger Bench of this Tribunal. From these exceptions carved out by the Apex Court, it is clear that, in each and every case it is to be seen that where under the Act, as amended, the appeal could not be made, the amendment will not apply retrospectively, for the principle is that the effect of an amendment is to regulate and not to confiscate a right of appeal. In the instant case, admittedly, the period has been reduced from two years to one year. When the period is shortened, the question of the effect of the shortening of the period of limitation arises in two ways; (i) when the shortening is done before the expiry of the shortened period for the cause of action; and (ii) when it is done after the expiry. In the instant case, therefore, the question that may arise is as to what is the effect of the shortening of the period of limitation before the expiry of the shortened period. As aforesaid, when the amended Section 35E(3) came into force on 11-5-1984 a period of 35 days was available to the Collector of Central Excise, Ahmedabad, to exercise his powers under Sub-section (2) of Section 35E, that is to say, he could have issued direction to file the appeal under Section 35E(2) of the Act upto 15-6-1984 but, in fact, he passed the Order on 27-9-1984. Therefore, the further question that may arise is : whether the amended provision left the Collector with such a short period (35 days in the instant case) for commencing legal proceedings so as to make it unpracticable for him to avail of the remedy or whether the time taken (from 11-5-1984 to 27-9-1984) by the Collector in issuing the direction could be held to be reasonable time as laid down by the Apex Court in the case of New India Insurance Co. Ltd. v. Smt. Shanti Misra, supra, in the facts and circumstances of the instant case! But, I am not concerned with these questions since the same have not been referred to me for determination and what is referred to me is only the abstract question, i.e. "whether for the purposes of limitation for an application under Section 35E(3) of Central Excises and Salt Act, 1944 after its amendment in 1984 shortening the period of limitation from two years to one year, if there is still time available even on the basis of the amended period of limitation within which such an application can be filed, the right has to be exercised within that period and whether the benefit of the earlier longer period of limitation prior to the amendment is not available". On the point of clarity, the question as to whether the time which was available to the Collector on the basis of the amended period of limitation was very little or inadequate time or the time actually taken by him was reasonable in the facts and circumstances of the case has not been referred to me. Hence it is for the Referring Bench to decide.
16. In the result, I answer the point of difference referred to me as under :
"The provisions of the amended Section 35E(3) of the Central Excises and Salt Act, whereby the period of limitation has been reduced from two years to one year would apply subject to the condition that if the new enactment leaves the claimant with such a short period for commencing the legal proceedings, so as to make it unpracticable for him to avail of the remedy, the same cannot be held to govern the case. Subject to this condition, the benefit of the earlier longer period of limitation prior to the amendment would not be available to the Collector to exercise his powers."
(G.P. Agarwal) 8-7-1992 Member (J) FINAL ORDER BENCH
17. In the third Member's opinion it has been observed that the question as to whether the time available to the Collector on the basis of the amended period of limitation was very little or inadequate time or the time actually taken by him was reasonable in the facts and the circumstances of the case has to be decided by the referring Bench. We have heard both the parties on this aspect. The learned Counsel Shri V. Lakshmikumaran submitted that the third Member has concurred with the Member (Judicial) proposed order that in matter like this, the shorter period of one year will apply subject to the reasonableness of the time available. According to the learned Counsel the Collector had ample time available to him because it is not merely the 35 days time from 11-5-1984 when the amendment for shorter time of limitation came into effect that has to be computed, but right from the introduction of the Finance Bill on 1-3-1984 because with that the Department was put on notice that the period available for review is proposed to be shortened. Further the learned Counsel urged that even after the Collector gives the direction for review application under Section 35E Central Excises and Salt Act, 1944, the Assistant Collector has three months from the receipt of such direction to file an appeal. The amendment to the Section has not disturbed this time available for filing the appeal. Therefore, the learned Counsel urged that the Collector had ample time to pass the direction under Section 35E. Shri L.N. Murthy, the learned Departmental Representative appearing for Collector submitted that the introduction of Finance Bill cannot be the starting point for computing time available to the Collector because it cannot be assumed that the Finance Bill will be passed totally in the form in which it was introduced in the Parliament. Therefore, the critical date will be the date on which the provisions of Bill came to be enacted after due assent by the President. From this date, the Collector had only 35 days time in the present case which according to the Department is not sufficient. The learned Departmental Representative pointed out already that the amendment was shortening the period available to the Collector for review from two years to one year and it will not be reasonable to further curtail it by requiring the Collector to exercise his power within whatever time may be available to him after the amendment comes into effect.
18. On the question of limitation it has been held by the third Member agreeing with the Member (Judicial) that so far as the period of limitation for commencing a legal proceeding is concerned, it is adjectival in character and has to be governed by the new Act. An exception to the application of limitation under the new Act is whether the new enactment leaves the claimant with such short period for commencing the legal proceedings so as to make it impractical for him to avail of the remedy. The referring Bench has to apply this criterion to the facts of the present case. The amended provisions came into effect on 11-5-1984 prescribing the limitation of one year from the date of the order sought to be reviewed under Section 35E. The Assistant Collector's order in this case was dated 16-6-1983. The one year period expired on 16-6-1984. Therefore from the date of amendment on 11-5-1984 the Collector had 35 days available under the amended Section to exercise his powers under Section 35E. The Hon'ble Member (Judicial) has already found in his order that 35 days time was sufficient for the purpose. The Technical Member in his proposed order has not adverted to this aspect as the proposed order was that the earlier period of limitation would apply. In view, however, of the opinion of the third Member, it has to be considered whether 35 days time available in this case for the Collector, was reasonable or not. The Department has not shown that the Collector had any administrative difficulty in passing an order for review within this time. There is no evidence of any circumstances which would have made it impracticable for the Collector to have issued the order for review in this case within the 35 days. The Collector is located in Vadodara and the order sought to be reviewed was passed by the Assistant Collector located in Ah-medabad. Therefore, with reference to the factual background of this case and in the circumstances noted above it has to be held that the Department has not shown that the 35 days time available in the present case was unreasonable or impractical. Therefore, in view of the majority decision the appeal is disposed of by upholding the order of the Collector (Appeals) on limitation because the Tribunal finds no reason on the facts and in the circumstances of this case to interfere with the order passed by the Collector (Appeals). The appeal is accordingly rejected. The Cross Objection also stands disposed of in the light of the view already taken in relation to the demand on grounds of limitation.