CX - Unless malafides are writ large on conduct of party, as normal rule, delay should be condoned: High Court
By TIOL News Service
AHMEDABAD, MAY 29, 2017: THE Facts are –
The Department had issued a SCN to M/s. Shriram Tubes Pvt. Ltd., Ahmedabad alleging non-payment of duty on the ground of illicit manufacture and clandestine clearance and also availment of CENVAT credit on inputs without actual receipt. The appellant was alleged to have issued bogus LR senabling the assessee to avail CENVAT credit fraudulently. Penalty of Rs.17.25 lakhs was imposed on the appellant by o-in-o 03/02/2010.
The appellant preferred Appeal before the tribunal on 03/02/2011. As there was a delay of 365 days in filing the appeal, an application for condonation of delay was also filed mentioning that -
- the appellant was unaware of the o-in-o imposing penalty;
- a letter was received in December 2010 from the Supdt. directing the appellant to pay the penalty imposed and this is when the appellant came to know about the order;
- the appellant called up his ex-employee who searched the old records and found the o-in-o which was handed over to appellant and thus the appeal came to be filed immediately thereafter but with delay;
- that there was neither any negligence nor any deliberate delay on the part of the appellant, and therefore, it was requested to condone the delay.
The CESTAT had by its order dated 17/04/2012 rejected the application for condonation of delay in preferring the appeal and consequently rejected the appeal filed by the petitioner. The ground - the appellant was CHA and being a CHA the appellant was required to take due care and was supposed to know the law.
Therefore, the petitioner is before the High Court.
It is submitted that the Tribunal had taken a hyper technical view; that there was no malafide intention on the part of the appellant in not preferring the Appeal within the period of limitation; that by not preferring the Appeal within the period of limitation, appellant was not going to be benefited, therefore tribunal ought to have condoned the delay in preferring the Appeal by imposing reasonable cost. Moreso, Appeals preferred by other co-noticees are pending before the tribunal (a fact fairly conceded by the counsel for the Revenue). Reliance is placed on the decision in Improvement Trust, Ludhiana Vs. Ujagar Singh and Others = 2010-TIOL-46-SC-LMT .
The High Court observed –
++ It appears that the tribunal has taken too hyper technical view while rejecting the delay condone application. From the impugned order passed by the tribunal, it appears that as such the tribunal has not at all considered the grounds stated by the appellant, mentioned in the delay condonation application.
++ There does not appear to be any other malafide intention on the part of the appellant in not preferring the Appeal within the period of limitation. As such, by not preferring the Appeal within the period of limitation, the appellant was not going to be benefited.
++ Even otherwise, considering the fact that when against the Order-in- Original, other Appeal /Appeals at the instance of the co-noticee is /are pending before the tribunal, the tribunal ought to have condoned the delay even on imposing reasonable cost.
++ Considering the aforesaid facts and circumstances and the law laid down by the Hon'ble Supreme Court in the case of Ujagar Singh and Others (supra) and from the conduct, behaviour and attitude of the appellant, it cannot be said that it had been absolutely callous and negligent in prosecuting the matter, for after it became aware of passing of the Order-in-Original, it prosecuted the matter with due diligence, and therefore, we are of the opinion that on imposing reasonable cost to be deposited with the Commissioner of Central Excise, which the appellant has agreed to pay to the Department, delay caused in preferring the Appeal be condoned .
The Tax appeal was allowed and the impugned order passed by the Tribunal was quashed and set aside on the condition that the appellant deposited Rs.15,000/- towards cost with the CCE, Ahmedabad.
On compliance thereof, the Tribunal was required to entertain the said Appeal and decide and dispose of the same in accordance with law.
The Appeal was required to be heard along with the appeals filed by the main assessee/co-noticee which are reportedly pending.
(See 2017-TIOL-1010-HC-AHM-CX)
