By TIOL News Service

NEW DELHI, JULY 21, 2015: ON 15.7.2011, a Commissioner passed an adjudication order against an assessee. This order was received in the office of the Chief Commissioner on 18.7.2011. On 25.10.2011, a Committee of Chief Commissioners reviewed the orders of the Commissioner and directed him to file an application in the Tribunal. This review order was received by the Commissioner on 31.10.2011. He filed the application on 16.11.2011, along with an application for condonation of delay was filed for condoning 8 days delay that occurred in review of the order of the Commissioner by the Committee of Chief Commissioners, for the Commissioner's order had been received by the reviewing authority on 18.7.2011 and the review order which was required to be passed within three months from the date of communication was passed after eight days of expiry of the period.

It was contended by the revenue before the tribunal that there was genuine reason for eight days delay in issue of the review order under Section 35-E(1) by the Committee of Chief Commissioners and, in any case, when the appeal had been filed within a period of four months of the receipt of the order in original, i.e. 15.7.2011, the delay in issue of the review order under Section 35-E(1) by the Committee of the Chief Commissioners deserved to be condoned. Reliance was placed on the Full Bench Decision of the Tribunal rendered in CCE v. Monnet Ispat & Energy Ltd. - 2010-TIOL-1133-CESTAT-DEL-LB.

On behalf of the assessee it was urged that the period of limitation prescribed for reviewing authority, the Committee of Chief Commissioner for issuing directions to the Commissioner in respect of adjudication of order for filing an appeal to the tribunal was three months from the date of communication of the order and there was no dispute that the impugned order was received on 18.7.2011and reviewed order was issued and after expiry of three months, that is, 25.10.2011 and, therefore, the delay could not be condoned as per the principle laid down in Central Excise v. M.M. Rubber Co - 2002-TIOL-111-SC-CX.

The Tribunal held that it cannot condone the delay as it has a duty to see before accepting an application filed by the a Commissioner under Section 35E(4) as an appeal against the Commissioner's order is backed by valid order passed by the Chief Commissioner under Section 35E (1). The tribunal held so inasmuch as it has formed the opinion that when a time limit is prescribed by statute for reviewing authority, i.e., that is Committee of Chief Commissioners for exercise of its power of superintendence and if the said authority issues an order under the said provision after the expiry of the period of limitation it would be an invalid and ineffective order and the tribunal has no power to validate and revive such an invalid and ineffective order. - 2012-TIOL-1301-CESTAT-DEL

Revenue appealed to the High Court and the High Court - 2013-TIOL-1203-HC-P&H-CX upheld the order of the Tribunal and rejected the Revenue appeal. Aggrieved Revenue took the matter in appeal to the Supreme Court.

The Supreme Court referred to the Larger Bench decision of the Tribunal in CCE v. Monnet Ispat & Energy Ltd. - 2010-TIOL-1133-CESTAT-DEL-LB, wherein it was observed,

"The Tribunal has ample power to condone the delay in filing the appeal including the one filed under Section 35E(4) of the said Act. The period which can be condoned in relation to filing of the appeal under Section 35E(4) of the said Act would include the period availed by the review committee in terms of Section 35E(1) or 35E(2) of the said Act. As regards the appeals by the Department in terms of Section 35E(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 35B(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."

The Supreme Court held the analysis made by the larger Bench to be correct. The Court passed mild strictures on the Tribunal observing, "the members deciding the lis by the impugned order should have kept themselves abreast to the Full Bench decision of the tribunal so that there would not have been two views as regards the same proposition."

Revenue Appeal is allowed; matter is remanded to Tribunal for consideration of the application for condonation of delay on its own merits.

(See 2015-TIOL-149-SC-CX)