2013 (7) TMI 889 - HC - Customs

Condonation of delay - 13 days in filing an application for reference before the tribunal to Appeal before Supreme Court - Held that - The period of 60 days prescribed for filing the application for reference expired on 7-6-1996. The application for reference was presented on 20-6-1996 with a delay of 13 days. The fact that the delay is within the condonable limits is not in dispute. Under the proviso to Section 130(1) of the Act as it then stood, as the order of the CEGAT was one passed before 1-7-1999 and it was not an order which relates to the duty of excise or to the value of goods for the purpose of assessment, the department had the right to file an application for reference under Section 130(1) of the Act. Therefore the mere fact that initially the papers were sent to the Central Board of Excise and Customs for the purpose of filing an appeal to the Supreme Court under Section 130E of the Act is not a reason to hold that after such a decision was taken, even if it be a wrong decision, the party aggrieved does not have the option of resorting to the right remedy available to him, namely, the filing of an application for reference, which alone was the remedy available in the instant case. In such circumstances, merely for the reason that before the period of 60 days expired, a wrong decision was taken to move the Apex Court by filing an appeal and within 60 days, a right decision was taken by the Central Board of Excise and Customs to file an application for reference before the CEGAT and within 13 days thereafter such a step was taken, it cannot be said that the petitioner did not act with due diligence. Order passed by the CEGAT declining to condone the delay of 13 days in filing the application for reference and consequently dismissing the application for reference requires to be set aside and the delay in filing the reference application condoned. Territorial jurisdiction to entertain this original petition. - Held that - In the instant case it is not in dispute that the goods were imported through Cochin Port. The original order of adjudication was made at Cochin. It was that order which gave rise to the appeal as well as the application for reference before the CEGAT. In such circumstances I find no merit or substance in the contention raised by the respondent that the cause of action for the instant original petition is only the dismissal of the application to condone the delay in filing the application for reference and therefore, no part of the cause of action arose within the local limits of the territorial jurisdiction of this Court. Dehors the import and the order of adjudication, the reference application could not have been made. It was that import and the order of adjudication which gave rise to the reference application. In any case, it cannot be said that no part of the cause of action arose within the local limits of the territorial jurisdiction of this Court. Customs, Excise and Gold (Control) Appellate Tribunal, South Zonal Bench at Madras (CESSTAT) directed to dispose of the reference application on the merits. - Decided in favor of revenue.

Summary

Issues Involved:
1. Territorial jurisdiction of the High Court to entertain the original petition.
2. Validity of the CEGAT's refusal to condone the delay in filing the application for reference.

Analysis:

1. Territorial Jurisdiction:
The petitioner argued that the Kerala High Court has jurisdiction to entertain the original petition because the import of goods occurred at Cochin Port, and the original adjudication order was passed at Cochin. The petitioner cited various judgments, including *Ambica Industries v. Commissioner of Central Excise* and *Canon Steels P. Ltd. v. Commissioner of Customs*, to support the claim that the jurisdiction is determined by where the cause of action initially arose, not merely where the appellate order was passed.

The respondent contended that the cause of action arose at Chennai since the CEGAT's decision to dismiss the delay condonation application occurred there. The respondent relied on cases like *Union of India v. Adani Exports Ltd.* and *Alchemist Limited v. State Bank of Sikkim* to argue that the facts relevant to the dispute occurred in Chennai, thus conferring jurisdiction to the Chennai High Court.

The Court held that since the original order of adjudication and the import of goods occurred in Cochin, a significant part of the cause of action arose within the territorial jurisdiction of the Kerala High Court. The Court referenced *Kusum Ingots & Alloys Ltd. v. Union of India*, emphasizing that a writ petition would be maintainable in either High Court where part of the cause of action arose. Consequently, the objection to the maintainability of the petition in the Kerala High Court was overruled.

2. Validity of CEGAT's Refusal to Condon Delay:
The petitioner argued that the CEGAT erred in not condoning the 13-day delay in filing the reference application, especially since the first respondent did not oppose the delay condonation application. The petitioner cited that the delay was due to the initial decision to file an appeal before the Supreme Court, which was later revised to file a reference application.

The respondent contended that the explanation for the delay was insufficient, emphasizing that the petitioner, being a senior officer, should have been more diligent. The respondent cited *Postmaster General v. Living Media India Ltd.*, arguing that the law of limitation binds everyone, including government authorities, and that gross negligence or lack of bona fides should not be condoned.

The Court found that the CEGAT had dismissed the delay condonation application on the grounds that the petitioner did not explain the actions taken between 6-6-1996 and 20-6-1996. However, the Court noted that the preparation of a reference application requires careful consideration and that the delay of 13 days was within the condonable limit. The Court held that the CEGAT should have exercised its discretion to condone the delay, especially given the absence of any opposition from the first respondent and the fact that a decision had been taken within the 60-day period to file a reference application.

The Court concluded that the CEGAT's refusal to condone the delay was erroneous and set aside the impugned order. The delay in filing the reference application was condoned, and the CEGAT was directed to dispose of the reference application on its merits.

Conclusion:
The High Court allowed the original petition, set aside the CEGAT's order refusing to condone the delay, and directed the CEGAT to dispose of the reference application on its merits. The Court also affirmed its territorial jurisdiction to entertain the petition, emphasizing that a significant part of the cause of action arose within its jurisdiction.