By TIOL News Service

NEW DELHI, DEC 17, 2013: THE issue involved is recovery of drawback sanctioned to the appellant. The Adjudicating Authority (Commissioner) confirmed the demand vide Order-in-Original dated 06.04.2009. The appellant and two other co-applicants filed Revision Application before the Joint Secretary within the time limit. But, in this case, the appeal lies with the CESTAT. (Tribunal is barred from jurisdiction in matters relating to drawback in respect of orders passed by the Commissioner (Appeals) - Not Commissioners).

The Revisionary Authority vide order dated 07.04.2010 dismissed the Revision Applications on the ground of jurisdiction as the appeal was to be filed only before the CESTAT. This order was not delivered to the applicants and also was not received by the Customs. Based on a query by the Customs in 2012, a copy of the order was supplied to the department by the Revisionary Authority. Consequent to the recovery proceedings initiated by the department, the assessee filed this appeal before the CESTAT with condonation of delay of 1236 days.

While disposing the COD application, Member (T) declined to condone the delay by holding that:

Right of appeal to redress a wrong is a valuable right, but such a right is to be exercised within the statutory period. Time being essential prescription of time limit for exercise of right to remedy is the necessity of civil society to put an end to the litigation without the same being perpetuated without time limit. For no adherence to law of limitation Right diminishes with the passage of time and remedy is thus barred thereafter. Unless a party exercising right of appeal is vigilant to limitation prescribed by law, it has no right to ask the other side to suffer for the indolence of the former. Merely explaining the revision remedy was sought, appellant is not absolved of its obligation to adhere to the limitation prescribed by law. Laxity does not add to longevity to a remedy which exhaust with the passage of time following doctrine of resjudicate. Casual approach of appellant shows its scanty regard to law.

Further it is not expected that an assessee who has been denied a drawback amounting to Rs.67,42,724/- would not be conscious of right to remedy of appeal in a right forum when recovery thereof was sought by Revenue. There was ill motive behind above, to keep the Revenue in dark and prevent recovery. Conduct of appellant proved that it has abused process of law.

However, Member (J) differed with the above view and held:

The appellant, instead of filing an appeal before Tribunal, challenged the impugned order before Joint Secretary (Revision), well within the limitation period. The office of the Joint Secretary also accepted the said revision application, though provisionally. The office of the Joint Secretary being the expert body, should have been in knowledge of the fact that inasmuch as the impugned order was passed by Commissioner and not by Commissioner (Appeals), the revision applications were not maintainable. In spite of that the revision applications filed on 15.7.09 were dismissed only on 7.4.10. Even the order passed on 7.4.10 was not received by the appellant or by the Customs department till 2012.

Further, it is on record that customs department placed an inquiry in the office of Joint Secretary regarding the status of the case. From the said act on the part of the Customs department, it can be reasonably assumed that even Customs department was aware of the fact of filing of revision application by the appellant instead of filing of an appeal and the appellant was never advised by the Customs department to file an appeal before Tribunal instead of revision application. Instead they inquired about the status of the revision application thus leading us to believe that even customs considered the filing of revision application as proper.

It is matter of record that even after passing of two years, Revenue did not initiate any recovery proceedings even in the absence of any stay order passed by the higher appellate forum. As such, it cannot be said that revision application was filed with an motive to delay the recovery proceedings. It is also on record that even the department was aware of the fact of filing of revision application before the Joint Secretary as it is only on their taking initiative with the office of Revision authority that the fact of dismissal of revision application came to light. In such a scenario to hold that the appellant filed the revision application with a malafide intention, which has resulted in process of abuse of law would not be justifiable.

In view of the difference of opinion, the matter has been referred to Third Member.

(See 2013-TIOL-1873-CESTAT-DEL)