2014 (9) TMI 975 - HC - Customs

Condonation of delay in filing an appeal - Period of limitation - Whether the time spent in prosecuting litigation diligently and bona fide before the Commissioner (Appeals) under the 1962 Act is to be excluded under Section 14 of the 1963 Act while determining whether the appeal was within limitation or not? - Whether the Commissioner (Appeals) under the 1962 Act could be considered as Court within the meaning of Section 14 of 1963 Act. - mis-declaration of goods - short payment of duty - Import of Zinc ash and Zinc Skimming for manufacture of fertilizer used by the farmers for agriculture purposes. Held that - The Commissioner (Appeals) hears appeals against the order of the authority lower in rank than him and is empowered to decide whether the order was valid or not. He is required to follow principles of natural justice before deciding the lis. The order passed by him is binding on the parties. The Commissioner (Appeals) may not be a civil Court within the meaning of Civil Procedure Code but has trapping of a Court and would be a Court, within the meaning of Section 14 of the 1963 Act. Section 14 of the 1963 Act is applicable to the proceedings under the 1962 Act in respect of an appeal provided under Section 128 and the time spent in the High Court in the abortive attempt to invoke its jurisdiction under Articles 226/227 of the Constitution will have to be excluded. After excluding the time in pursuing the litigation, the appeal filed before the Commissioner (Appeals) would be within the period of limitation. The bona fides of the petitioner in pursuing the remedy under Articles 226/227 of the Constitution was never in dispute. Accordingly, the writ petition is allowed and the impugned order dated 27-11-2013 (Annexure P-14) is set aside. - Decided in favor of assessee.

Issues Involved:
1. Exclusion of time spent in prosecuting litigation under Section 14 of the Limitation Act, 1963.
2. Whether the Commissioner (Appeals) under the Customs Act, 1962 can be considered a 'Court' within the meaning of Section 14 of the Limitation Act, 1963.

Issue-wise Detailed Analysis:

1. Exclusion of Time Spent in Prosecuting Litigation under Section 14 of the Limitation Act, 1963:

The court examined whether the time spent by the petitioner in prosecuting litigation diligently and in good faith before the Commissioner (Appeals) under the Customs Act, 1962 should be excluded under Section 14 of the Limitation Act, 1963. The relevant legal provisions, including Section 14 and Section 29(2) of the 1963 Act, were analyzed. Section 14 allows for the exclusion of time spent in bona fide litigation in a court without jurisdiction, while Section 29(2) stipulates that the provisions of Sections 4 to 24 of the Limitation Act apply to special or local laws unless expressly excluded.

The court noted that the conditions for the application of Section 14 include:
1. Both proceedings must be civil proceedings prosecuted by the same party.
2. The prior proceeding must have been prosecuted with due diligence and in good faith.
3. The failure of the prior proceeding must be due to a defect of jurisdiction or similar cause.
4. Both proceedings must relate to the same matter in issue.
5. Both proceedings must be in a court.
6. All these conditions must co-exist.

The court emphasized that Section 14 is intended to provide relief against the bar of limitation in cases of mistaken remedy or selection of a wrong forum and should be interpreted to advance the cause of justice. The court also highlighted that Section 29(2) does not require the special statute to expressly exclude the application of Section 14, but it should be inferred from the statute's language and scheme.

The court referred to the Supreme Court's decision in Union of India v. Popular Construction, which held that express exclusion may be inferred from the scheme and object of the special or local law. The Customs Act, 1962, being a complete code by itself, was examined to determine whether the provisions of the Limitation Act, 1963, were excluded. The court concluded that neither express provisions nor necessary implications excluded the applicability of Section 14 to appeals under Section 128 of the Customs Act, 1962.

The court cited the decision in Vijay Brothers and Others v. Union of India, which held that Section 14 of the Limitation Act, 1963, applies to proceedings under Section 128 of the Customs Act, 1962. The court also referred to the Supreme Court's decisions in State of Goa v. M/s. Western Builders and M/s. Consolidated Engg. Enterprises v. Principal Secretary, Irrigation Department, which supported the applicability of Section 14 to proceedings under special statutes.

The court distinguished between the extension of the prescribed period under Section 5 of the Limitation Act, 1963, and the exclusion of time under Section 14, noting that the former is discretionary while the latter is mandatory if the conditions are satisfied. The court held that the time spent in pursuing the remedy under Articles 226/227 of the Constitution should be excluded, making the appeal before the Commissioner (Appeals) within the period of limitation.

2. Whether the Commissioner (Appeals) under the Customs Act, 1962 can be considered a 'Court' within the meaning of Section 14 of the Limitation Act, 1963:

The court examined whether the Commissioner (Appeals) under the Customs Act, 1962, could be considered a 'Court' within the meaning of Section 14 of the Limitation Act, 1963. The court referred to the Supreme Court's decision in P. Sarathy v. State Bank of India, which held that an authority with the trappings of a court is a 'Court' within the meaning of Section 14. The court also cited the Karnataka High Court's decision in HMT Ltd. v. Commissioner of Customs, Chennai, and the Single Judge's decision in Pritam Kaur v. Sher Singh, which supported the view that authorities with the trappings of a court are considered courts for the purposes of Section 14.

The court noted that the Commissioner (Appeals) hears appeals against orders of lower authorities, follows principles of natural justice, and passes binding orders, thus having the trappings of a court. The court distinguished the decision in Commissioner of Sales Tax, UP v. M/s. Parson Tools and Plants, which held that the revisional authority under the UP Sales Tax Act was not a court, by highlighting the differences in the provisions and scheme of the Customs Act, 1962.

The court concluded that the Commissioner (Appeals) under the Customs Act, 1962, functions as a court or has the trappings of a court and, therefore, qualifies as a 'Court' within the meaning of Section 14 of the Limitation Act, 1963.

Conclusion:

The court held that Section 14 of the Limitation Act, 1963, is applicable to proceedings under the Customs Act, 1962, and the time spent in pursuing the remedy under Articles 226/227 of the Constitution should be excluded. The Commissioner (Appeals) under the Customs Act, 1962, was considered a 'Court' within the meaning of Section 14. The writ petition was allowed, and the impugned order dated 27-11-2013 was set aside. The matter was remitted to the appellate authority to decide the appeal on merits in accordance with the law.

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