2009 (5) TMI 683 - AT - Central Excise

Restoration of appeal - condonation of delay - Held that - Once it is clear that the Tribunal could not have dismissed the appeal for want of clearance from COD, in our consideration opinion, mere delay on the part of the applicants in approaching the Tribunal, cannot be a ground to reject the application. Once it is shown that the original order of dismissal of the appeal itself was absolutely bad in law and this aspect having brought to the notice of the Tribunal, it will be the duty of the Tribunal to recall such order and avoid injustice to the aggrieved party. Viewed from this angle, therefore, delay in filing the application cannot be a justification for dismissal of the appeal - appeal restored.

Summary

Issues:
Application for restoration of appeal and stay application dismissed for want of clearance from COD.

Analysis:
The appellants filed an application for restoration of the appeal and stay application, challenging the order passed by the Commissioner, Lucknow. The appeal was dismissed on 30th November, 2006, for lack of clearance from COD, referring to the decision in ONGC v. CCE, Calcutta. The appellants filed a restoration application on 6th February, 2009, stating that COD had granted clearance on 14th February, 2008. The Tribunal granted time to file an affidavit explaining the delay in filing the restoration application. The learned advocate for the appellants argued that dismissal for lack of COD clearance should not deny the statutory right of appeal, citing relevant Supreme Court and Delhi High Court decisions.

The learned DR contended that the Tribunal's order was justified as per the Apex Court's direction to not proceed without COD clearance. The Tribunal noted that appeals under excise, customs, or service tax laws are statutory remedies, and denial of appeal on non-statutory grounds would result in injustice. The requirement of COD clearance was based on Apex Court directions in ONGC cases, emphasizing conciliation before litigation. The Delhi High Court clarified that lack of clearance does not warrant dismissal but pending status for reconciliation or clearance.

The Tribunal clarified that the directive to not proceed without COD clearance does not empower dismissal but refraining from further steps. The power of COD is limited to reconciliation efforts or granting clearance for litigation, preserving the right of litigants to file appeals. Concerns about increased pendency do not justify denying statutory rights, as legislative action is required to address pendency issues. The Tribunal held that delay in approaching the Tribunal cannot justify dismissal if the original dismissal was legally flawed, emphasizing the duty to recall orders to prevent injustice. Consequently, the Tribunal allowed the application, restoring the appeal and stay application for further hearing.

In conclusion, the Tribunal's decision highlighted the importance of statutory appeal rights and clarified that lack of COD clearance should not lead to dismissal but pending status for reconciliation. The ruling emphasized the duty to prevent injustice by recalling orders if legally flawed, regardless of delays in approaching the Tribunal. The decision upheld the appellants' right to appeal and directed the restoration of the appeal and stay application for further proceedings.