By TIOL News Service

AHMEDABAD, JULY 08, 2015: THE Petitioner had preferred appeal before the CESTAT, against the order passed by the Commissioner of Central Excise (Appeals), which arose from the order passed by the adjudicating authority being Order in Original. In the said appeal there was delay of 118 days in preferring appeal and therefore, the Tribunal dismissed the appeal on the ground of delay since as per the Tribunal, there was no power to condone the delay beyond 30 days by the Commissioner (Appeals). Under the circumstances, this petition was filed.

When the appeal came up for hearing before the Division Bench of the High Court, the Division Bench noticed that since as per the provisions of section 35 of the Central Excise Act, 1944, the delay cannot be condoned beyond the period of 90 days, i.e., 60 days being the prescribed period and further discretion to condone the delay is 30 days. But the petitioner placed reliance upon the another decision of the Division Bench of High Court in the case of Amitara Industries Ltd. vs. Union of India decided on 30.01.2013 and contended that as per the view taken in the said decision, the delay can be condoned beyond the period of 90 days provided there is a good case on merits and the petitioner also relied upon other decisions of High Court including the decision in the case of D.R. Industries Ltd. vs. Union of India 2008-TIOL-300-HC-AHM-CX. The Division Bench found that the matter is required to be referred to the Larger Bench for decision. Hence, the matter has been referred to the Larger Bench inter alia with the following questions:

Where a statutory remedy or appeal is provided under Section 35 of the Central Excise Act, 1944 and the delay cannot be condoned under Section 35 beyond the period of 90 days, then whether Writ Petition under Article 226 of the Constitution of India would lie for the purpose of condoning the delay in filing the appeal?

When if the statutory remedy or appeal under Section 35 is barred by the law of limitation whether in a Writ Petition under Article 226 of the Constitution of India, the order passed by the original adjudicating authority could be challenged on merits?

On behalf of respondent department, it was contended that:

It has become a regular practice on the part of the assessee to prefer writ petition under Article 226 of the Constitution in practically all cases where the limitation period is over for condonation of delay and such course deserves to be discouraged. The view taken by the Division Bench of the High Court in the case of D.R. Industries Ltd. deserves to be diluted or deserves to be further explained keeping in view the subsequent decisions of the Apex Court wherein the Apex Court has declined interference to the orders of the High Court wherein the power under Article 226 of the Constitution were not exercised on account of the expiry of the period of limitation including for condonation of delay.

After hearing both sides extensively and referring to various judgments including that of Supreme Court in case of Singh Enterprises, the Larger Bench held:

As per the decisions of various Division Bench of this Court, it can be said that the legal position prevailing uptil now are as under -

(1) The appeal deserves to be preferred within the prescribed time limit as per section 35 of the Act and the delay beyond the period of 30 days cannot be condoned by the appellate authority. Hence, the outer limit of preferring appeal including the period for condonation of delay could be said as 90 days.

(2) In exceptional cases, where it is a case of "gross injustice", the aggrieved person can invoke the writ jurisdiction under Article 226 of the Constitution and if the Court is satisfied that it is an exceptional case of gross injustice, the power under Article 226 can be exercised.

After referring to various decisions on the jurisdiction of High Courts under Article 226 and whether Section 35 of the Central Excise Act can whittle down or dilute or nullify the power of the constitutional court under Article 226 of the Constitution, the High Court answered the questions referred as under:

Limitation provided under section 35 of the Act cannot be condoned in filing the appeal beyond the period of 30 days as provided by the proviso nor the appeal can be filed beyond the period of 90 days. The petition under Article 226 of the Constitution would not lie for the purpose of condonation of delay in filing the appeal. However,

A) The petition under Article 226 of the Constitution can be preferred for challenging the order passed by the original adjudicating authority in following circumstances that

A.1) The authority has passed the order without jurisdiction and by assuming jurisdiction which there exist none, or

A.2) Has exercised the power in excess of the jurisdiction and by overstepping or crossing the limits of jurisdiction, or

A.3) Has acted in flagrant disregard to law or rules or procedure or acted in violation of principles of natural justice where no procedure is specified.

(See 2015-TIOL-1556-HC-AHM-CX-LB)