By TIOL News Service

NEW DELHI, JUNE 05, 2014: THE Appellant as a 'merchant exporter' claimed and obtained duty drawback amounting to Rs.67,42,724/- during the period June 2007 to September 2007.

The drawback sanctioned was objected to by the department and accordingly a SCN dated 20.08.2008 came to be issued. Subsequently, the Adjudicating Authority passed an o-in-o on 06.4.2009 confirmed the allegations leveled in the SCN.

Consequently, the appellant filed a Revision Application on 15.7.2009before the joint Secretary who provisionally accepted the Applications.

Later, vide Order dated 07.4.2010 without giving any hearing,the Revisionary authority dismissed the revision applications of the Applicant and Braun Textile Processors on the ground that the applications filed were beyond jurisdiction and not maintainable as the appeal was maintainable before CESTAT. However, the appellant claimed that the said order dated 07.4.2010 was not delivered to the appellant nor the Customs till 2012.

It is further informed that the Customs Department was also unaware about the decision of the Revisionary authority, therefore, the Customs department placed a query to the office of Joint Secretary regarding status of the cases and the department was informed by the Section Officer of the Office of Ld. Joint Secretary, on 28.02.2012 that the revision application filed by the Applicant and M/s Braun was dismissed by the Joint Secretary. A copy of the Order was also supplied to the Customs Department.

After two and a half years, the Appellant received a letter dated 21.8.2012 from the Customs department for recovery of the amount confirmed by the adjudicating authority and it was also indicated that the Revision application of the Appellant was dismissed vide Order dated 07.4.2010.

In the meantime the appellant approached Punjab & Haryana High Court by filing a petition but the same was dismissed on 06.11.2012 on the sole ground that admittedly the Order in Original dated 6.4.2009 was passed by the Commissioner as Adjudicating Authority and thus, Section 35EE does not provide for revision against such orders. However, the High Court granted the appellant the liberty to avail the legal remedy available to the Applicant.

And this is how they are before the Tribunal with a Stay application & an appeal along with an application for Condonation of delay of 1236 days in filing the appeal.

While disposing the COD application, Member (T) declined to condone the delay by concluding that the casual approach of appellant shows their scant regard to law and that by filing an appeal in the wrong forum there was ill motive to keep the Revenue in dark and prevent recovery. Inasmuch as the 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.

+ 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.

+ 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 a motive to delay the recovery proceedings.

+ 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 was referred to Third Member.

We reported this order as 2013-TIOL-1873-CESTAT-DEL.

The Third Member on reference has passed an order recently.

The Member(T) after hearing the submissions observed –

++ It is seen that both the appellant and M/s Braun Textile Processors had filed revision applications before the Joint Secretary and their revision applications were rejected as being filed beyond jurisdiction by a common order dated 07/04/10.

++ The order-in-revision does not indicate that this order had been passed after hearing the appellant and the copy of the same had been despatched to them. In view of this, the appellant's contention that they became aware of the order dated 07/04/10 of the JS (RA) only when the recovery proceedings were initiated has to be accepted.

++ The appellant as well as M/s Braun Textile Processors filed writ-petitions before Punjab & Haryana High Court and the High Court while upholding the rejection of their revision applications as not maintainable for the want of jurisdiction, had directed they may seek relief at the appropriate forum.

++ Accordingly appeals were filed alongwith COD applications and the COD application of M/s Braun Textile Processors was dismissed by the Tribunal alongwith their appeal and thereafter they filed appeal before Delhi High Court and the High Court vide judgment dated 18/2/14 has ordered that having regard to peculiar circumstances the petitioner's appeal before the CESTAT shall be taken up for consideration un-influenced by the question of delay and pending applications, if any, with respect to waiver of pre-deposit shall be first decided by the Tribunal before adjudication upon the merits of the case.

++ Thus, in the case of M/s Braun Textile Processors, the High Court has set aside the Tribunal's order refusing to condone delay and has directed the Tribunal to hear the stay application and appeal on merits without being influenced by the question of delay.

++ In view of this, in the present appeal also, where the facts and circumstances are identical, the same view has to be taken and the delay of 1236 days has to be condoned.

Accordingly, the third Member (T) on reference agreed with the order recorded by the Member (Judicial).

Inasmuch as in view of the majority order, the delay of 1236 days in filing the appeal was condoned and the CoD application was allowed.

(See 2014-TIOL-948-CESTAT-DEL)