Custom, Excise & Service Tax Tribunal
Cce, Raipur vs M/S.Monnet Ispat & Energy Ltd. Unit-Ii on 22 June, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066. BENCH-LB PRINCIPAL BENCH - COURT NO. I Excise Appeal No. E/2976/09-Ex with Excise C.O. No. 40/10-Ex. Br. [Arising out of Order-in-Original No.Commr./RPR/44/2009 dated 30.6.2009 passed by the Commissioner, Raipur] For approval and signature: Honble Mr. Justice R.M.S. Khandeparkar, President Honble Mr. Dr.Chittaranjan Satapathy, Technical Member Honble Mr. D.N. Panda, Judicial Member 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether Their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? CCE, Raipur Appellants Vs. M/s.Monnet Ispat & Energy Ltd. Unit-II Respondent Present for the Appellants :Shri B.K. Singh, Jt. CDR & Shri Sumit Kumar, DR Present for the Respondent : Shri K.K. Gupta, Advocate CORAM:Honble Mr.Justice R.M.S. Khandeparkar, President Honble Dr.Chittaranjan Satapathy, Technical Member Honble Mr. D.N. Panda, Judicial Member Date of Hearing: 22.06.2010 Date of decision:_________ ORDER NO. _______________ DATED:_______ PER: JUSTICE R.M.S.KHANDEPARKAR 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 v/s. 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 passed under section 35E ( 1) or (2) of the said Act is an administrative order and it is beyond the jurisdiction of the Tribunal to sit in appeal over such order and for the same reason, it will not be possible for the Tribunal to deal with the question, as to whether the order there-under was passed within the period of three months or not. While dealing with the appeals, according to ld. Representative of the Department, the Tribunal has only to ascertain whether the appeal has been filed within one month from the date of communication of such order by the Committee to the appellant. 4. The ld. Advocate for the appellant on the other hand placing reliance in the decision of the Apex Court in the matter of Commissioner of Customs and Central Excise vs. Hongo India (P) Ltd. reported in 2009 (236) E.L.T. 417 (S.C.) and of the Tribunal in the matter of Commissioner of Central Excise, Bhubaneshwar-II vs. Bhushan Ltd. reported in 2008 (232) E.L.T. 238 (Tri. Del.), Commissioner of Central Excise, Mumbai vs.Azo Dye Chem reported in 2000 (120) E.L.T. 201(Tri. L-B) and in Commissioner of Customs (Prev.), Kolkata vs. Narendra Kumar Taparia reported in 2008 (225) E.L.T. 141 (Tri.- Kolkata) submitted that the validity of the order passed under provisions of law comprised under section 35 E (1) & (2) of the said Act is beyond the purview of appellate review by the Tribunal but no appeal filed on the basis of any decision taken beyond the period of three months prescribed there-under would be maintainable. He further submitted that since the Committee itself has no jurisdiction to exercise its powers beyond the period prescribed under the statutory provisions, Tribunal cannot extend the said period in order to retrospectively validate the order passed by such Committee beyond the prescribed period. 5. The point which has been referred for consideration has two parts. One relates to the delay on account of the decision by the Committee under Section 35 E (1) or (2) being beyond the prescribed period and second part relates to delay in filing of appeal beyond the period prescribed for the same under sub-section (4) of Section 35 E of the said Act. As regards the order under sub-section (1) or (2) of Section 35 E a period of three months has been prescribed under sub-section (3) thereof in that regard, while the period of one month is prescribed for filing appeal under 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 appealed against such order or any part thereof, file, within forty-five days of the receipt of the notice, a memorandum of cross-objections verified in the prescribed manner against any part of the order appealed against and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3). (5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period. (B) Section 35 E which deals with the subject of power of the Committee of Chief Commissioners of Central Excise or Commissioner of Central Excise to pass certain orders read thus:- SECTION 35E. Powers of Committee of Chief Commissioners of Central Excise or Commissioner of Central Excise to pass certain orders. (1) The Committee of Chief Commissioners of Central Excise may, of its own motion, call for and examine the record of any proceeding in which a Commissioner of Central Excise as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Commissioner [or any other Commissioner to apply to the Appellate Tribunal for the determination of such points arising out of the decision or order as may be specified by the Committee of Chief Commissioners of Central Excise in its order. (2) The Commissioner of Central Excise may, of his own motion, call for and examine the record of any proceeding in which an adjudicating authority subordinate 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) The Committee of Chief Commissioners of Central Excise or the Commissioner of Central Excise, as the case may be, shall make order under sub-section (1) or sub-section (2) 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 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 provision for ascertaining legality or propriety of such decision or order before filing the appeal against the same, came to be incorporated in the said Act pursuant to the decision of the Apex Court in ONGC vs. Collector of Central Excise reported in 1992 (61) E.L.T.3 (S.C.) and ONGC Ltd. vs. City & Indus. Dev. Corpn., Maharashtra reported in 2009 (233) E.L.T. 30 (S.C.). 9. Section 35 E (1) and 35 E (2) of the said Act do not contemplate any adjudication as such of any dispute between the parties to the proceedings. Neither of those sub-sections deals with any decision finalising the dispute between the parties. The opinion is to be formed merely to avoid frivolous appeals being filed, as also where it would not be worthwhile to contest the proceedings. Obviously, therefore, the Committee would not decide any of the rights of either of the parties to the matter in dispute nor the opinion formed by the Committee can result in any prejudice or injury of whatsoever nature to an assessee. Nevertheless, one cannot forget that the order, made based on the opinion formed by the Committee, either under Sub-Section (1) or Sub-Section (2) of Section 35 E of the said Act is an administrative order and for that purpose, the sub-section (3) of Section 35 E prescribes a specific period of limitation. 10. Sub-section (3) of Section 35 E as seen above, prescribes period of three months for an appropriate decision by such committee and it also provides that the said period should be counted from the date of communication of the order of the adjudicating authority. Apart from the fact that the decision is by administrative authority, the provision of law mandates the Committee to take the decision within the prescribed period of three months and the same is evident from the expression shall used in relation to the period prescribed for taking such decision. The formation of opinion by the Committee regarding legality or propriety of the order of the authority and order on the basis of such opinion shall be within three months from the date of communication of the order of the Adjudicating Authority. 11. It is settled law that where an authority constituted under a statutory provision is required to perform certain function under the statute within a prescribed period for performance of such function, then such authority is undoubtedly expected to perform its function 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 undoubtedly expected to take an appropriate decision within a period of three months from the date of communication of the order of the adjudicating authority to them. However, it cannot be said that pursuant to failure to take such decision by the Committee within the prescribed period of three months, the Tribunal will have no jurisdiction to condone the delay in that regard and or any such condonation of period will amount to validate the decision taken by such authority beyond the said period. In such circumstances, the provisions of Section 35 B (5) of the said Act can be pressed into service. 13. It is, therefore, clear that when a statutory provision requires a particular act to be done in a specific period of time and also lays down that on failure to do so it would lead to specific consequences, then the possibility of all other consequences stands excluded. Being so, though the decision for filing an appeal is required to be taken within three months and on the communication of the same to the concerned authority filing of the necessary application to the Tribunal should be within one month from the date of receipt of such communication, the law provides that on filing of such application, the provisions of section 35 B (4) onwards would get attracted to such proceedings. It would, therefore mean that the Tribunal will have to exercise its jurisdiction in the matter of condonation of delay even in relation to the period beyond the period of one month available to the authorised officer from the date of communication of the order of the Reviewing Committee. Such period would obviously include the one between the date of communication of the order of the Adjudicating Authority to the Reviewing Committee till the date of receipt of the order of the Reviewing Committee by such authorised Officer. These are the specific consequences which are contemplated under the statutory provisions in the matter of filing of appeal by the Revenue Authority under section 35 E (4) of the said Act and in case of delay either in reviewing the order of in filing the application and, therefore, all other consequences are clearly excluded. 14. Contention was sought to be raised on behalf of the Department that by virtue of section 29 (2) of the Limitation Act 1963, the Tribunal would be deemed to have powers under section 5 of the Limitation Act to condone such delay. The 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.). 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 Act is intended to be made applicable in view of the proviso to section 128 of the Act in the instant case. The observation clearly applies to the proceedings under the Central Excise Act 1944 taking into consideration the provisions of law comprised under section 35 B (5). It cannot be forgotten that the said Act is a complete code and it provides for all the necessary eventualities including the provision relating to the filing of appeals, period of limitation in that regard, and power to condone the delay. On examination of the scheme of the said Act, it becomes abundantly clear that though provision of section 5 of the Limitation Act is excluded, the principle there-under stands incorporated in Section 35B (5) of the said Act. 15. Section 35 B (5) specifically prescribes period of limitation for appeals under section 35 B, as also provide for power to condone the delay in filing the appeal. Section 35E (4) clearly provides period of one month from the date of communication of order under sub-section (1) or sub-section (2) of Section 35E for filing the appeal. It further provides that on such appeal being filed the provisions of this Act regarding appeals, including the provisions of sub-section (4) of section 35B shall, so far as may be, apply. In other words, pursuant to the filing of the application in terms of section 35 E (4) of the said Act, the provisions of law applicable to the appeals filed under section 35 B would also apply to such proceedings. 16. Undoubtedly, in terms of section 35 B (3) an appeal under section 35 B has to be filed within a period of 3 months from the date on which the order sought to be appealed is communicated. It is pertinent to note that sub-section (3) while prescribing the period of limitation, it specifically states that the said period would apply not only to the assessees but also to the Department. This is apparent from the expression 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. Section 35 B not only applies to the appeals filed by the assessees either against the order passed by the Commissioner as adjudicating authority or by the Commissioner (Appeals), but it also applies to the appeals preferred by the Department against the orders passed by the Commissioner (Appeals). 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 comprised under Section 35-B(5) of the said Act, therefore, clearly disclose incorporation therein the principle embodied in Section 5 of the Limitation Act, 1963. While, Section 35-B (5) applies on the face of it, to all the appeals filed under section 35-B itself, the section 35-E (4) specifically provides that the applications filed there-under should be heard by the Tribunal as if the same are appeals filed against the orders of the lower authority under the said Act and provisions of the said Act including Section 35-B (4) shall apply to such applications. In other words the power to condone delay on satisfaction about sufficient cause for the same is to be exercised not only in cases of the appeals under section 35 B, but also in cases filed under section 35E. 18. Once it is clear that the power and the jurisdiction relating to condonation of delay is to be exercised in the same manner in both the cases the appeals by the assessee as well as the appeals by the department including those under section 35-E (4), of the said Act - it would relate to the whole of the period of delay from the date of first communication of the order sought to be challenged till the date of filing of the appeal. The first communication of the order of the adjudicating authority would be the date of receipt of copy of the order by the reviewing committee. Being so, the department, in case of delay beyond four months, will have to explain the same and such period would include the period availed by the reviewing committee to form its opinion and to communicate the same to the authorised officer to file the appeal. 19. It was sought to be argued that the decision of reviewing committee is administrative one which is beyond the subject matter of appellate review and the period is to be counted from the date of communication of said decision to the adjudicating authority for filing the appeal. The contention is totally devoid of substance. The appeal is not against the order of the Reviewing Committee. It is against the order of the adjudicating authority. The review proceeding form part of the preparation of appeal by the department. The Tribunal cannot sit in appeal over the review order of the Committee but Tribunal must be satisfied about delay in taking the decision as the same form part of the procedure relating to preparation of appeal against an impugned order. 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 adjudicating authority. At the same time sub-section (4) of section 35E provided that the appeal should be filed 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. Having noted the same, and the fact that the power conferred under section 35E is that of superintendent to ensure that the subordinate officers exercise their powers correctly and properly, and the fact that the period of one year from the date of the order is more than adequate to ensure action in appropriate cases particularly in comparison with the much shorter period an assessee has within which to exercise his right of appeal, and that on the other hand there was no such requirement or practice and the period within which Board can interfere was left to the discretion of the Board coming to know of the existence of the particular order at some point of time, however distant, only administrative chaos would result and, therefore, it was held that one year period fixed under the statutory provision was to be given its literal meaning. The background and the circumstances in which the said decision was arrived at, no more exist, apart from the total change in the statutory provision on the relevant aspect. M.M. Rubbers case, therefore, is of no help in the case in hand. 23. It is pertinent to note that previously the period prescribed for the decision by the reviewing committee under section 35 E was one year. However, the same has been reduced to the period of three months. The legislature has taken a conscious decision to prescribe lesser period for such decision by the Committee. Obviously, the same has been taken with the view to put an end to any uncertainty, which may remain on account of pendency of litigation. The legislature itself having consciously reduced the period for appropriate decision by the statutory body, undoubtedly, the Tribunal should have due respect for the legislative mandate. However, that does not mean that the power of the Tribunal to condone the delay stands curtailed. On the contrary, it is specifically protected by providing that the provisions of the said Act regarding the appeals including section 35 B (4) would apply to such proceedings on filing of the application by the revenue authority under section 35 E (4) of the said Act. 24. It is pertinent to note that 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 Bhushans case was in relation to the old provision of law and not the law as it stands today. This is clear from para 19 of the said decision which reads thus:- 19. Before we conclude, we may mention that sub-section (3) of Section 35-E was amended with effect from 11.5.2007 while the matter was pending with the Committee. In terms of the amended provisions, the Committee is required to take decision within a period of three months from the date of communication of the order. A question arose as to whether the case would be governed by the unamended or the amended provisions. However, this was not pursued in course of hearing. Both sides argued on the premise that the instant case will be governed by erstwhile provision. We are of the same view. No submission to the contrary was advanced on behalf of the respondent. Besides factually the appeal was preferred after the expiry of period of one year from the date of communication of the order of adjudicating authority to the Committee and the matter was therefore, squarely covered by the decision of the Apex Court in M.M. Rubber case. 26. The decision of the Gujarat High Court in the case of Shree Ganesh Dyeing & Ptng. Works was in relation to the point as to whether the Commissioner himself could have filed the appeal or not. It has no relevancy to the matter in issue. 27. The decision of the Apex Court in Hongo India case was on the point whether the High Court in the reference application under section 35H (1) of unamended Central Excise Act has power under section 5 of the Limitation Act 1963 to condone the delay beyond the period prescribed under the main statute that is Central Excise Act. Obviously, it was in relation to the point of applicability of the provisions of Limitation Act to those proceedings before the High Court. 28. The decision of the Himachal Pradesh High Court in Bhillai Wires case was in relation to the old provisions under section 35E. 29. In Trishla Distributors case the Tribunal did not lay down any law as such. It proceeded on certain undisputed facts. 30. In Narendra Kumars case the same was delivered in the context of Section 129 A (3) of the Customs Act, 1962 which is equivalent to Section 35 B (3) of the Central Excise Act, 1944 and in the peculiar facts of the case. This is apparent from para 4 and 5 of the decision which reads thus:- 4. In this case, the impugned order passed by the lower appellate authority as stated in the appeal 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 appeal, so that such delay in filing appeals can be avoided. 5. Moreover, I find that the lower appellate authority has upheld the confiscation of the impugned foreign origin goods as well as the confiscation of the truck. He has only set aside the confiscation of jute bags and small penalty of Rs.5,000/- (Rupees Five Thousand) only for the reasons stated by him. Hence on merit also, considering the nature of the dispute and the small amount involved, the impugned order requires no intervention of the Tribunal. 31. In Azo Dye Chem case the Larger Bench was dealing with the matter arising under the old provisions of law. The decision is not in relation to the provisions of law as they stand today. This is evident from para 4 & 5 of the decision which read thus:- 4. On examination into the legality or propriety of an order passed by a Commissioner, the Board may direct the Commissioner to apply to the Appellate Tribunal for the determination of the points arising out of the decision which are to be specified by the Board in its order. The order of the Board must be passed within one year from the date of the decision rendered by the Commissioner. The order so passed by the Board should be communicated to the adjudicating authority. Within three months from the date of its communication to the adjudicating authority, that authority should make an application to this Tribunal. The application so filed within the period of three months should be heard by this Tribunal as if such application were an appeal made against the decision of the adjudicating authority. 5. Clause (4) mandates that the adjudicating authority should apply to this Tribunal within a period of three months from the date of the communication of the order passed by the Board. The application so filed by the adjudicating authority within three months could be heard by this Appellate Tribunal as if that application were an appeal against the decision of the adjudicating authority. This is crystal clear from the use of the following words :- Where the adjudicating authority makes an application to the Appellate Tribunal within a period of three months from the date of communication of the order under sub-section (1), such application shall be heard by the Appellate Tribunal, as if such application were an appeal made against the decision. (Emphasis added) What is meant by these words "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 application filed by the adjudicating authority pursuant to the direction given by the Board, before the Appellate Tribunal. For that purpose, provisions contained in sub-section (4) of Section 35B have been read into clause (4) of Section 35E of the Act. 32. In the matter of Velingkar Brothers case the same was on the issue whether section 5 of the Limitation Act, 1963 was applicable to the appeal filed before the High Court under Income-tax Act or not. For the reasons stated above, it is of no help in the case in hand. PER: D N PANDA 33. I am in respectful agreement with the result of reference arrived at by Honble President. Considering that certain considerations like equality before law, public policy, public interest, public justice, prevention of miscarriage of justice, reparability of injury, bonafides, lack of negligence and prevention of public mischief govern the law of imitation calling for exercise of discretion to condone delay judiciously, following paragraphs elucidate such aspects . RIGHT OF APPEAL IS VALUABLE RIGHT 34. Right of appeal is a valuable right for remedy to redress a wrong. But such a right is exercisable within the period prescribed by law. Although revenue acquires such right, that is exercisable only after order of review passed by the Committee of Commissioners or the Reviewing Commissioner as the case may be u/s 35E of Central Excise Act, 1944 sees the light of the day. In absence of such order Revenue is remediless and delay in making such order also makes the appeal belated. Just like an assessee gets three months period to decide its remedy of appeal, Revenue is equally ensured similar time period by law. The reviewing authority taking decision to file appeal has statutory duty. Inaction of the authority, failure to take decision within the prescribed period for reasons beyond their control or even failing to discharge the duty for reasons attributable to them defeats public interest and puts revenue in jeopardy. There are two aspects of the remedy of appeal by revenue. One such aspect is decision by reviewing authority to prefer appeal and the other is to file the appeal duly after decision. Delay may be made at two stages or at either of the stages. While in one hand delay in decision by reviewing authority prevents filing of appeal duly, on the other, filing may be delayed in spite of decision to file is made 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, Revenues Appeal is not made fatal. That is admitted condoning delay in view of certain exercising power of condonation of delay. However, because Tribunal is vested with power of condonation of delay, there shall not be grant of premium to the default of delay without prescription of lawful measure against breach of duty. LAW OF LIMITATION IS FOUNDED ON PUBLIC POLICY 36. Time is essence of life. Prescription of time to sever the bond between the right and remedy is necessary for a civilized society for alternate use of time. Right diminishes to be recognised with the passage of time and failure for persuasion calling for destruction thereof by limitation. The law of limitation fixes a lifespan for legal remedy for the redress of the legal injury suffered. But time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a lifespan is fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicue up sit finis litium (it is for the general welfare that a period be put to litigation). LEGAL REMEDY IS TO REPAIR DAMAGE CAUSED BY REASONS OF LEGAL INJURY 37. Rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delays in approaching the court is always deliberate. Unless there exists malafide, liberal construction to condone delay is an approach of the Courts so as to advance substantial justice vide Shakuntala Devi Jain v. Kuntal Kumari [AIR 1969 SC 575.] and State of W.B. v. Administrator, Howrah Municipality [AIR 1972 SC 749]. The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the court in different situations is not because on the expiry of such time a bad cause would transform into a good cause. Rules of limitation are not being meant to destroy the rights of parties, they are meant to see that parties 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 condone the delay due to laches on the part of the applicant, the courts compensate the opposite party for his loss. DELAY CONDONATION POWER IS VESTED TO ADVANCE CAUSE OF JUSTICE 39. Limitation provision in the statute cannot be disregarded on equitable grounds. It has been held in the case of Bhag Singh and Others V. Major Daljit Singh and Others 1987 (32) ELT 258 (SC) that the law is well settled by several decisions reported in AIR 1962, (Punjab) 446 and AIR 1956 (Allahabad) 677 as well as of Apex Court decision in AIR 1964 (SC) Page 215 that the Court while considering an application on limitation issue will consider the facts and circumstances not for taking too strict and pedantic stand which will cause injustice but to consider it from the point of taking a view which will advance the cause of justice. DELAY CONDONATION POWER IS EXERCISABLE DISCRETONARILY 40. According to the ratio laid down by Apex Court in the case of Commissioner of Customs & Central Excise v. Hongo India (P) Ltd - 2009 (236) E.L.T. 417 (S.C.), existence of provision in section 35B(5) of the Central Excise Act, 1944 to condone delay for sufficient cause shown excludes application of provisions of Section 5 of the Limitation Act. In the case of State of Nagaland V. Lipok AO - 2005 (183) E.L.T. 337 (S.C.) it has been held by Honble Supreme Court that the proof by sufficient cause is a condition precedent for exercise of the discretion vested on the Tribunal. What counts is not the length of the delay but the sufficiency of the cause and shortness of the delay is one of the circumstances to be taken into account in using the discretion. The provision contemplates that the Court has to go in the position of the person concerned and to find out if the delay can be said to have been resulted from the cause which he had adduced and whether the cause can be recorded in the peculiar circumstances of the case is sufficient. Although no special indulgence can be shown to the Government which, in similar circumstances, is not shown to an individual suitor, one cannot but take a practical view of the working of the Government without being unduly indulgent to the slow motion of its wheels. DELAY IS CONDONABLE TO PREVENT MISCARRIAGE OF JUSTICE 41. Where refusal to condone the delay results in grave miscarriage of justice, it would be a ground to condone the delay as held in 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 represents collective cause of the community does not deserve a litigant-non-grata status. The Courts, therefore, are informed with the spirit and philosophy of the provision in the course of the interpretation of the expression of sufficient cause. Merit is preferred to scuttle a decision on merits in turning down the case on technicalities of delay in presenting the appeal. It has also been held in that case that If appeals brought by Government are lost for defaults, no person is individually affected, but what, in the ultimate analysis, suffers is public interest. The decisions of Government are collective and institutional decisions and do not share the characteristics of decisions of private individuals. PUBLIC INTEREST WEIGHS CONSIDERATION 42. The law of limitation embodied in the Statute is, no doubt, the same for a private citizen as for governmental authorities. Government, like any other litigant must take responsibility for the acts, omissions of its officers. But a somewhat different complexion is imparted to the matter where Government makes out a case where public interest is shown to have suffered owing to acts of fraud or bad faith on the part of its officers or agents and where the officers were clearly at cross-purposes with it. Such factors which are peculiar to and characteristic of the functioning of the Government. Government decisions are proverbially slow encumbered, as they are, by a considerable degree of procedural red-tape in the process of their making. A certain amount of latitude is, therefore, not impermissible. It is rightly said that those who bear responsibility of Government must have a little play at the joints. Due recognition of these limitations on governmental functioning - of course, within reasonable limits - is necessary if the judicial approach is not to be rendered unrealistic. It would, perhaps, be unfair and unrealistic to put Government and private parties on the same footing in all respects in such matters. Implicit in the very nature of Governmental functioning is procedural delay incidental to the decision-making process. In para 17 of the judgment in State of Nagaland V. Lipok AO - 2005 (183) E.L.T. 337 (S.C.) it has also been held that it is axiomatic that decisions are taken by officers/agencies proverbially at slow pace and encumbered process of pushing the files from table to table and keeping it on 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 Honble 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-`-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 movement of the file from one table to another for which the Honble Court directed the Chief Commissioner of Customs, Mumbai, to conduct an inquiry or to get an inquiry conducted by an officer not below the rank of Commissioner of Customs and give a categorical report to the Honble Court as to why the concerned authorities did not act with promptitude in filing the special leave petition which may have enabled the respondent to escape from this Country. There appears to be much more than what meets the eye. Honble Supreme Court got the expression from the explanation furnished that the matter was deliberately delayed by interested persons in the concerned Department. The Honble Court had also expressed its grief stating that this is not the first time that the Honble Court had come across a case of the nature involved in the above case. In the case of Union of India V. Vidarbhavenaer Industries - 1994 (69) E.L.T. 3 (S.C.)it was noticed by the Apex Court that there was an inordinate delay in filing the Special Leave Petitions. The only submission made by the learned counsel for the petitioners raised on the averments in the application for condonation of delay was that the relevant file was misplaced for quite some time in the office of the Central Agency and the Special Leave Petitions were filed after some delay even though that file could not be traced. There was nothing in the application for condonation of delay to indicate the action taken to find out how the file got lost or to fix the responsibility of someone who should be accountable for the same. Learned counsel, even on the date of hearing was unable to indicate the same. Honble Court enquired whether any action was taken to identify the person responsible for the lapse and to fix responsibility for the same. Apparently, no such action was taken. This being so, a mere statement that the relevant file was lost in some office was not treated as sufficient cause for condonation of inordinate delay. It may have been a different matter had the logical action been taken by the petitioners to identify the persons responsible for the lapse and necessary action taken against him while ensuring further a non-repetition of similar lapses which, the Honble Court was sorry to say, are not uncommon in Special Leave Petitions filed by the Union of India. Honble Court was constrained to make these observations 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 Honble 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 in taking the decision whether he would pursue the remedy by way of an appeal or application since he is a person legally injured while State is an impersonal machinery working through its officers or servants. Such position was highlighted in State of Haryana v. Chandra Mani and Ors. [1996 (3) SCC 132]; and Special Tehsildar, Land Acquisition, Kerala v. K.V. Ayisumma [1996 (10) SCC 634]. It was noted that adoption of strict standard of proof sometimes fail to protract public justice, and it would result in public mischief by skilful management of delay in the process of filing an appeal. VIGILANT IS PROTECTED 45. Just because Tribunal believes that ordinarily a litigant does not stand to benefit by lodging an appeal late and refusing to condone delay in filing appeal by Revenue can result in meritorious matters being thrown out at the very threshold and cause of justice being defeated following the ratio laid down by Honble Supreme Court in the case of Collector, Land Acquisition, Anantnag, And Other V. Mst. Katiji And Others - 167 ITR 471 (SC): 1987(28) ELT 185 (SC), Revenue has no pre-emptory right to get its delay condoned mechanically. Certainly when delay is condoned, a cause is decided on merits after hearing the parties. When substantial justice and technical considerations are pitted against each other, cause of substantial justice is preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafide. A litigant does not stand to benefit by restoring to delay. In fact he runs a serious risk. It is grasped that Judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is Capable of removing injustice and is expected to do so. Therefore Revenue without any casual approach and without prejudicing its interest is expected to be more vigilant to seek expeditious decision for filing of appeal duly. Review exercise prescribed by law is a legal obligation of the Authority to be discharged within the prescribed period. Breach thereof puts revenue in jeopardy because no liability for breach of duty is prescribed by letters of law. ORDER
PER: JUSTICE R.M.S.KHANDEPARKAR
46. In the result, therefore, the point which has been 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 concerned Bench for further proceedings in the matter. (Pronounced in the open Court on ___________) (JUSTICE R.M.S.KHANDEPARKAR) PRESIDENT (DR.CHITTARANJAN SATAPATHY) TECHNICAL MEMBER (D.N. PANDA) JUDICIAL MEMBER anita