Condonation of delay

PJ/Case Laws/2011-12/1354

Case: SHAHUL TEXTILES MILLS (P) LTD. versus CESTAT, CHENNAI

Citation: 2011 (271) E.L.T. 179 (Mad.)

Issue:- Condonation of delay – Order passed in 2004 but received on 27.09.2008 – appeal filed on 06.01.2009 after delay of 10 days – whether there is inordinate delay in filing appeal?

Brief Facts:- Appellant was engaged in the manufacture of cotton yarn. According to Revenue the appellant were clandestinely removing the manufactured cotton yarn without payment of duty by wrongly availing the exemption under Notification No. 1/93 as amended. Further allegation levied was that the appellant was using bogus invoice for clearing the goods without payment of duty. It was also alleged that the appellant had cleared the cotton yarn over and above the exempted limit of Rs. 30, 00,000/-.

The Adjudicating Authority determined the amount of duty payable by the appellant to be a sum of Rs. 69,370/. An equal amount by way of penalty plus Rs. 5,000/- was imposed under Rules 9(2), 52A and 173-Q of the Central Excise Rules, 1944 and Section 11AC of the Central Excise Act, 1944.

Appeal before the Commissioner (Appeals) was dismissed on 6-1- 2004. Appellant received the order on 27.09.2008.

Appellant preferred further appeal before the Tribunal on 6-1-2009. Since the appellant had 90 days time to file the appeal and the appeal was filed only on 6-1-2009, there was a delay of 10 days in filing the appeal. The Tribunal rejected the application for condonation of delay, passed the impugned order stating that there was inordinate delay in pursuing the appeal.

Against the said order, appellant is before the High Court.

Appellant’s Contention:- According to the appellant, since its unit was closed, the appellant did not have the opportunity before the Commissioner (Appeals) and no notice was also served on the appellant.

It is also the case of the appellant that even the order copy dated 6-1-2004, passed in Appeal was received by the appellant only on 27-9-2008. And as 90 days time was available to them, they had filed appeal on 06.01.2009 but there was delay of 10 days in filing appeal.

Reasoning of Judgment:- The High Court held that in the said circumstances, if the order dated 6-1-2004 was served on the appellant only on 27-9-2008, it cannot be held that there was any delay beyond 10 days as has bean stated in the order passed in the application for condonation of delay. The reason adduced by the appellant was due to the closure of the Mills, it took some time for gathering materials for filing the appeal, which cannot be held to be not a justifiable reason. Certainly, it cannot be held that there was inordinate delay in filing the appeal. Inasmuch as going by the date of receipt of the order and the time allowed for filing the appeal, the delay was only 10 days in filing the appeal before the Tribunal, the HC does not find any justification in the order passed by the Tribunal in having rejected the appellant's appeal on the ground of inordinate delay. The impugned order is therefore, set aside. Tribunal directed to admit appellant’s file as well as dispose of stay application in accordance with law.

Decision:- Appeal allowed.

Comment:- This decision clearly held that the time limit is to be computed from the date of communication of order. Since the unit was closed and hence the order cannot be communicated, when it was communicated the appeal was filed.

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PJ/Case Laws/2011-12/1354

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