Condonation of Delay in filing appeal

PJ/Case Laws/2010-11/1074

Case: Shri Rajan Bhalchandra Datar v/s Commissioner of Central Excise and Customs, Nashik

Citation: 2011-TIOL-72-HC-MUM-CX

Issue:- Whether the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) was justified in condoning delay of 7 days in filing appeal by the respondents under Section 25 of the Sick Industrial Companies Act, 1989?

What will be the date of communication of order of BIFR to the Commissioner of the Central Excise?

Brief Facts:- The Board for Industrial and Financial Reconstruction (BIFR) passed an order on 05.12.2006 sanctioning a Scheme of Rehabilitation under SICA. The issue involved was the date of communication of order of BIFR to the Commissioner of the Central Excise. Notarized copy of the order of the BIFR dated 5.12.2006 was served on the Commissioner on 13.12.2006. Authenticated copy of the order dated 5.12.2006 was dispatched by the BIFR on 7.12.2006 addressed to the Aurangabad Commissionerate. The Aurangabad Commissionerate received the said order on 12.12.2006 and after considering that the petitioner’s unit did not fall under their jurisdiction, they forwarded the authenticated copy of the order dated 5.12.2006 to the Nashik Commissionerate which was received by the Nashik Commissionerate on 2.1.2007.

Respondent-department challenged the order of BIFR in an appeal before the AAIFR on 02.02.2007 and also prayed for condonation of delay. AAIFR held that there was sufficient cause for not filing the appeal within 45 days from the date of issue of order. And condoned the delay.

Petitioner-assessee filed writ petition in the High Court. A Division Bench of the High Court by its order dated 16.09.2008 set aside the AAIFR order dated 23.03.2007 and directed the AAIFR to pass fresh order after considering the points raised by the both sides.

Accordingly, the matter was heard afresh and by the impugned order dated 28.09.2010, the AAIFR condoned the delay of seven days in filing the Appeal beyond 45 days as the AAIFR is empowered to condone the delay upto fifteen days after 45 days from the date of communication of the order of BIFR.

Against this order, Petitioner has filed the present writ petition.

Petitioner’s Contentions:- It is contended that the impugned order has been passed by the AAIFR in gross violation of the order passed by this Court wherein specific directions were given to consider the points raised by the petitioners in their reply, however, the objections raised by the petitioners have not been considered. It is further contented that the statement made by the respondents in the application seeking condonation of delay that they were unaware of the order passed by the BIFR dated 5.12.2006 till 2.1.2007 was totally false, because notarized copy of the order was served upon the Commissioner of Central Excise, Nashik and this fact has been suppressed by the respondents. It is further contented that the AAIFR failed to consider within the statutory period of 45 days and, therefore, the AAIFR was not justified in condoning the delay.

Petitioner placed reliance on Pundlik Jalam Patil v/s Executive Engineer, Jalgaon [(2008) 17 SCC 448] and on Balwant Singh V.s Jagdish Singh & others [(2010) 8 SCC 685].

Respondent’s Contentions:- In the application for condonation of delay in filing appeal, the Department had contended that till the date of receipt of the authenticated copy of the order of BIFR, the Commissioner of Central Excise, Nashik was not aware of the order passed by the BIFR and, therefore, the appeal could not be filed within 45 days.

Before the High Court it was submitted that initially the appropriate authority on 23.1.2007 decided to accept the order of BIFR and thereafter on reexamination decided to contest the order of BIFR on the ground that the said order is prejudicial to the interest of the Revenue. Accordingly, the appeal was filed on 2.2.2007. These facts were not given in the application for condonation of delay.

With regard to the allegation of making false statement, it was contented by the Revenue that for computing the period limitation, the relevant date is the date of receiving authenticated copy of the order and not the date on which the notarized copy of the order was received.

Reasoning of Judgment:- The High Court perused the provisions of Section 25 of the SICA and held that there is no dispute that under Section 25 of SICA, the expression “within 45 days from the date on which the copy of the order is issued to him” means “within 45 days from the date of communication of the order”.

It was further held that there was no dispute that the Commissioner of Central Excise, Nashik had received notarized copy of the order of BIFR on 13.12.2006, and authenticated copy of the order of BIFR. However, the AAIFR, by accepting the contention of the petitioners held that 12.12.2006 i.e. the date on which the Aurangabad Commissionerate received the authenticated copy of the order of BIFR would be the relevant date for computing the limitation. Thus, receiving notarized copy of the order and authenticated copy looses significance once is considered to be the relevant date for computing the period of limitation for filing the appeal.

It was noted that the appeal was filed seven days after the expiry of 45 days. This delay of seven days could be condoned by AAIFR only if sufficient cause was shown.

A perusal of the order of AAIFR showed that none of the contentions of the petitioner have been considered and the AAIFR condoned the delay by making general observation.

The only reason given in the application seeking condonation of delay was found to be incorrect and did not constitute sufficient cause for condoning the delay, because, even if the authenticated copy was received, why the appeal could not be filed ought to have been set out in the application seeking condonation of delay.

Failure to set out reasons for the delay in the application seeking condonation of delay shows complete callousness and dereliction of duty on the part of the Officer who had affirmed the application seeking condonation of delay. It is high time that appropriate action is taken against such officers perform their duties casually and without application of mind.

The High Court considered the contentions made by the Revenue before them in writ petition was observed that though these facts on record were not set out in the application seeking condonation of delay, the said facts cannot be ignored. These facts constitute sufficient cause for condoning the delay of 7 days.

It was further held that there is no doubt that the inaccurate statement made in the application seeking condonation of delay does not amount to showing any cause much less a sufficient cause for condoning the delay of seven days, in view of the material now brought on record, the order of AAIFR in condoning the delay of seven days in filling the appeal was upheld.

It was further held that the decision of Apex Court in Pundlik Jalam Patil v/s Executive Engineer, Jalgaon was distinguishable on facts. It was further held that the decision of the Apex Court in the case of Balwant Singh v/s Jagdish Singh & others was applicable but the facts brought before the High Court constituted sufficient cause for condoning the delay.

In the end, the High Court held that the inaccurate contained statement in the application seeking condonation of delay did not amount to showing sufficient cause and the AAIFR was not justified in condoning the delay without considering the inaccurate statement contained in the application seeking condonation of delay. However, on the basis of the material now placed on record, there was sufficient cause and the delay of seven days in filling the appeal deserves to be condoned.

Decision:- Writ petition dismissed.

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PJ/Case Laws/2010-11/1074

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