By TIOL News Service

MUMBAI, JAN 09, 2018: AN appeal was filed against the order-in-original dated 13.01.2016 along with an application for condonation of the delay in filing the same.

The facts go thus -

+ Being aggrieved by the o-in-o dated 13.01.2016, the applicant approached the Bombay High Court on 4.5.2016. The matter was listed for hearing on 22.8.2016, 29.08.2016, 19.09.2016, 26.09.2016, 10.10.2016, 17.10.2016, 24.10.2016, 21.11.2016, 28.11.2016, 05.12.2016 & 19.12.2016. However, the same could not be heard on these dates.

+ The matter was finally disposed of on 30.3.2017 on the ground of alternate remedy.

+ After disposal of the matter by the High Court, the applicant consulted their Chartered Accountants, who in turn consulted legal Counsel regarding future course of action to be taken in the matter viz. whether to file appeal before Supreme Court or not. The applicant applied for a certified copy of the order on 21.4.2017 and, thereafter, they decided to file appeal before Tribunal.

+ It is the claim of the applicant that provisions of Section 14 of the Limitation Act would apply to the facts of the present case and hence the period during which the writ/appeal was pending before the Bombay High Court should be excluded for calculating the period of limitation for filing the appeal. Reliance is placed inter alia on the decisions in Collector, Land Acquisition Anantnag And Another Vs. MST. Katiji and Others - 2002-TIOL-444-SC-LMT, West Coast Paper Mills Ltd. - 2004-TIOL-14-SC-LMT-LB, J.M. Bhansali And Ors.The State of Madras And. Anr. AIR 1968 Mad 373. (1968) 1 MLJ 442. 1968 21 STC 411, Ashok Kumar Tiwari - 2014-TIOL-500-CESTAT-DEL, Sonia Overseas Pvt. Ltd. - 2014-TIOL-1750-HC-P&H-Cus, Cairn Energy India Pty. Ltd. - 2014-TIOL-1978-HC-AP-CX.

The AR had come fully prepared to oppose the application.

He submitted -

(i) The appellant had given an undertaking that they have previously not filed any appeal, or writ petition or suit regarding the impugned order before any court or any other authority or any other Bench of the Tribunal. This is a mis- statement as the appellant have themselves admitted that the delay is caused as they were pursuing the case in Bombay High Court.

(ii) The COD application states that the delay of 12 months (not given in days) is factually incorrect as the OIO of Commissioner is passed on 13.01.2016, whereas the appeal has been filed on 26.05.2017. The delay thus exceeds 16 months (more than 480 days).

(iii) The appeal has been filed in the Tribunal more than 55 days after passing of the order by the Bombay High Court. The grounds stated that they had consulted their CA who in turn consulted legal counsel regarding future course of action to be taken in the matter is without any factual evidence as the documents filed with the appeal shows that the Advocate before the High Court as well as the Tribunal is the same.

The AR further added -

(i) Sec. 14 of the Limitation Act shows that period spent by the appellant bona fide in the Court without jurisdictioncan be excluded from the period of limitation. The two important elements in Sec. 14 of the Limitation Act are (i) that the plaintiff has been prosecuting with due diligence another civil proceeding, and (ii) the same should be prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(ii) Both the above elements of due diligence and good faith are absent in the instant case.The appellants were well aware that the right forum to appeal in the instant case is the Tribunal but consciously decided to file a writ petition.The writwas filed to overcome the burden of pre deposit of 7.5% of duty confirmed required to be deposited as per Sec 83 of the Finance Act, 1994. The appeal was filed with conscious knowledge that the High Court is not the appropriate forum to file an appeal against the confirmation of Service Tax demand.

(iii) That the appellants chose to take the chance and pursue their case with the Bombay High Court instead of coming to the correct forum which is the Tribunal. This correctly shows that the petition in the High Court was not “prosecuted in good faith”.

(iv) A duly diligent appellant, in any case, would take the liberty of filing simultaneous appeal in this Tribunal.

Adverting to various judicial pronouncements of the Supreme Court namely, Ketan V Parekh - 2011-TIOL-113-SC-FEMA, Patel Brothers - 2017-TIOL-04-SC-VAT, Singh Enterprises - 2007-TIOL-231-SC-CX, Flemingo (Duty Free Shop) Pvt. Ltd. - 2014-TIOL-2436-HC-MUM-Cus, the AR concluded that the application for condonation of delay be dismissed.

After considering the elaborate submissions made by both sides, the Bench adverted to section 35B of the CEA, 1944 and inter alia observed thus -

++ It is seen that Tribunal has been granted the power to condone the delay if it is satisfied that there was sufficient cause for not presenting the appeal within the period prescribed under Sub-Section (3) of Section 35B of Central Excise Act. It is also seen that no upper limit has been prescribed for condoning the delay in filing the appeal provided sufficient cause is shown for not presenting the appeal within the prescribed period.

++ It is seen that all the case laws cited by the Revenue, the decisions are in respect of provisions of lawwhich prescribe not only a normal period of limitation but also an upper limit of condonation and grounds for granting condonation.

++ Apex Court has interpreted Section 29(2) of the Limitation Act byobserving that wherever the law prescribed a complete code prescribing time limit as well as power of condonation like an upper limit for condonation of delay or grounds of condonation, the law of limitation cannot be invoked to by-pass the same.

++ Thus, in the instant case, laws of limitation cannot be invoked as we are dealing with a complete code prescribed under Central Excise Act, where not only the period of limitation is prescribed but also the grounds on which condonation can be granted are prescribed. However it is seen that, there is no upper limit for period of condonation in the instant case. Thus there is no necessity to invoke the provisions of the Limitation Act, so long as the reasons of delay are covered by the provisions of law.

++ The provisions pertaining to time limit for filing of appeal before CESTAT and for condonation of delay are contained in Section 35B (3), (4) & (5).

++ It is apparent that so long as the appellants are able to show that there was sufficient cause for not presenting it within period prescribed under section 35B(3) (the Tribunal may admit the appeal after the expiry of the relevant period).

++ It is seen that Bombay High Court while disposing the writ observed as follows:

“2. We do not think that the conditions imposed by the statute are either excessive or arbitrary requiring our interference in writ jurisdiction particularly in the absence of any material in that behalf. It is inconceivable that an assessee approaches this Court in writ jurisdiction and can avoid filing of an appeal only on such a plea as is projected, namely, a pre-deposit of 7.5% of the tax to avail of his right of appeal.

3. The writ petition is misconceived and dismissed on the ground that there is an alternate and equally efficacious remedy available to the petitioner."

Even Hon'ble High Court has described their petition as ‘misconceived' while dismissing it.

++ In the above circumstances when various High Courts had taken a clear stand on the issue, the appellants approach to Hon'ble High Court on the same issue of pre-deposit was not with clean hands. Even after the decision of Hon'ble High Court was received, the appellants delayed the filing of appeal for a long time. This shows the callous approach .

++ High Court disposed off the petition on 30.3.2017 but the appellants applied for copy of order after 21 days on 21.4.2017. The copy of order was received on 27.4.2017 but the appeal was filed on 26.5.2017 almost a month after receipt of order. When the matter has been agitated before High Court for over a year it is obvious that the defense of the appellants should have been ready and immediately the appellants should have filed the appeal before Tribunal.

Concluding that, in the circumstances, the Bench is unable to take a liberal approach, the application for condonation of delay was dismissed.

(See 2018-TIOL-130-CESTAT-MUM)