Condonation of delay

PJ/CASE STUDY/2010-11/33

13 December 2010

PJ/Case Study/2010-11/33

Case Study

Prepared By:

CA. Rajani Thanvi

Sukhvinder Kaur LLB [FYIC]

And Megha Jain

Introduction:

Delay in filing appeal can be condoned if sufficient and reasonable cause has been shown for such delay. However, the delay is required to be condoned or not cannot be decided by the Appellate Authority on its own without giving an opportunity to the assessee to explain the delay. This would be in clear violation of principles of natural justice. In the case under study also, the appeals filed after delay of 3 days were rejected and the appellants have filed appeals before the Tribunal.

Relevant Legal Provisions:

Section 35 (1) of the Central Excise Act, 1944: -

35. Appeals to Commissioner (Appeals). - (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer, lower in rank than a Commissioner of Central Excise, may appeal to the Commissioner of Central Excise (Appeals) hereafter in this Chapter referred to as the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or order:

Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.

In the case of M/s Sidhi Vinayak Industries, Jodhpur & Ors v/s CCE, Jodhpur II

[Final Order No. 678-722/2010-EX[DB] dated 24.09.2010]

Brief Facts:

- Appellants are manufacturers of SS Cold Rolled Patta/ Patti falling under Sub-heading no. 7219.90 of the Central Excise Tariff Act, 1985. The appellant are paying excise duty under the compound levy scheme introduced vide Notification No. 17/2007-CE dated 01.03.07 issued under Rule 15 of the Central Excise Rules, 2002.

- On the ground that Education Cess and Secondary Higher Education cess were also types of excise duties, the Appellants did not pay the said cesses over and above the amount paid under Compound levy during the period from March 2008 to October, 2008.

- Department issued show cause notices to the appellants demanding that they pay the Education cess and SHE cess for the relevant period. Appellants referred to the relevant provisions introducing Education cess and SHE cess of the Finance Acts as well as the Notification No. 17/2007-CE, dated 1.03.2007 and contended that amount of duty specified under the Notification will be in full discharge of duty leviable on the production. And no Education Cess and Secondary Higher Education cess is required to be paid over and above the said amount. Reliance was also placed on the Order-in-Appeal no. 12-47 (DK) CE/JPR-II/2009 dated 03.02.09 passed by the Commissioner (Appeal) wherein it was held as under:

“….after the appellants have paid the compound levy duty, no further duty in the form of education cess and higher education cess is separately payable during the period 09.07.2004 to March, 2008 in terms of Notification no. 34/2001-CE dated 28306.2001 and 17/2007-CE dated 1.03.07….”

- The Original Authority did not adhere to the averments made by the appellants and passed the impugned order confirming the demand with interest and also imposed penalty. The order was communicated to the appellants on 06.11.2009.

- Aggrieved by the said order, the appellants filed appeals before the Commissioner (A) which were sent by courier on 28.12.2009. But the courier delivered the appeals in the office of Commissioner (Appeals) on 08.01.2010. There were 46 appeals where the delay has occurred. Thus, there was delay of 3 days in filing of appeals.

- The Commissioner (Appeals) rejected all the 46 appeals on the ground that there was no sufficient cause disclosed for 3 days delay in filing the appeal.

- Aggrieved by the dismissal of their appeals, appellants have approached the Tribunal praying for setting aside of the impugned order.

Submission of the Appellants:

¨ The appellant submit that they have sent all the 46 appeals were sent by their consultant by a common courier. It was delivered to the courier on 27.12.2009 and 28.12.2009. But the courier delayed the same and delivered on 8.1.2010. There was delay of mere 3 days. The appellants were not aware of the fact that the delay has occurred because the courier normally takes one day to deliver the documents but he has taken 10 days in this case.

¨ Further, the Commissioner (A) did not grant any personal hearing to the appellants to submit grounds for such delay and rejected all the appeals. It is gross violation of natural justice.

¨ The appellants were not aware of the delay which is clear from the fact that the all the appeals were filed without condonation of delay.

¨ The appellant further submitted that there was only delay of 3 days and hence the same should have been condoned.

Issue Involved:

The issue involved in this case was that

Whether the appeals filed on delay of 3 days after the prescribed period of 60 days could be rejected without affording the opportunity of personal hearing?

Decision of the Tribunal:

Ø The Tribunal held that the prescribed period for filing the appeals is sixty days and considering the same there was delay in receipt of the appeals in the office of Commissionerate by three days. At the same time, records disclose that the appeals were in fact posted within a period of limitation.

Ø It was further held that apart from that, the Commissioner (A) is empowered under the statutory provisions to condone the delay to the extent of thirty days beyond the prescribed period of sixty for filling the appeals.

Ø The Tribunal found that the Commissioner (A) had without issuing any notice to the appellants, without complying with the basic principles of natural justice, observed that there was no sufficient cause disclosed for three day’s delay in filing the appeal and dismissed the appeals.

Ø The Tribunal held that apparently, the impugned order discloses arbitrary exercise of jurisdiction by the Commissioner (A) in dismissing the appeals. On this ground alone, the impugned orders were held to be not sustainable and were liable to set aside.

Ø Thus, it was held that from facts it was clear that the appellants had sent the appeals within the period of limitation, though they were received in the office of commissioner (A) within a period of three days beyond the prescribed period the said delay deserves to be condoned. Matters are remanded to the Commissioners (A) with direction to hear the matters on merits, after hearing the application for stay in accordance with provisions of law.

Ø Delay in filling appeals is condoned.

Order of the Tribunal:

Impugned orders set aside. Appeals allowed.

Conclusion:

The Tribunal rightly held that dismissal of appeal for delay of 3 days beyond the prescribed time period for filing appeal of 60 days was not justified. More so, when the impugned order was passed without hearing the appellants which was clear violation of principles of natural justice and when the Commissioner (Appeal) had power to condone the delay of 30 days beyond the normal period of limitation of 60 days.

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PJ/CASE STUDY/2010-11/33
13 December 2010

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