2014 (1) TMI 1386 - HC - Central Excise

Condonation of delay - Delay due to 17 skeleton staff working in the writ petitioner company and therefore, it was not possible for them to keep track of the things - Held that - petitioner company was declared sick and proceedings were initiated in Delhi High Court for winding up. There were only skeleton staff working in the writ petitioner company due to which, it was not possible for them to keep track of the things. Because the Advocates gave legal opinion on 02.02.2005 informing the writ petitioner that they have a good case for filing an appeal. Thereafter, the writ petitioner applied to the High Power Committee for COD clearance and only after obtaining clearance, the appeal could be filed. When the writ petitioner has been declared a sick company and proceedings have been initiated for winding up and when the writ petitioner was entangled in litigation and other consequential proceedings, they cannot be expected to take prompt steps for filing the appeal. Even though, the Writ Court will not normally interfere with the discretion exercised by the Tribunal, but in this case, having gone through the fact that the proceedings have been initiated against the writ petitioner / company, we are of the view that it is a fit case to condone the delay - Delay condoned.

Summary

Issues:
Delay in filing appeal under section 35B(3) of Central Excise Act - Whether delay satisfactorily explained?

Analysis:
The case involves a writ petition filed by the appellant challenging an order passed by the Customs, Excise and Service Tax Appellate Tribunal, Kolkata, dismissing the application to condone the delay in filing the appeal. The appellant received the Order-in-Original on 8.11.2004, and the appeal should have been filed by 08.02.2005. However, the appeal was filed on 27.07.2005, with a delay of 170 days. The appellant contended that the company was declared sick, proceedings for winding up initiated, and only skeleton staff were working, making it difficult to keep track of deadlines.

The Tribunal dismissed the application to condone the delay, stating that the explanations provided for the delay were not satisfactory for various periods. The appellant challenged this decision in the writ petition, arguing that due to the company's sick status and limited staff, prompt action for filing the appeal was not feasible. The Department highlighted the lack of prompt action by the appellant despite receiving communication to file the appeal.

The Court considered Section 35B(3) of the Central Excise Act, which requires appeals to be filed within three months of receiving the order. The Court noted that the appellant, being a sick company with winding-up proceedings, faced challenges in taking prompt action. Despite generally not interfering with the Tribunal's discretion, the Court found it appropriate to condone the delay in this case due to the circumstances faced by the appellant.

Consequently, the Court set aside the Tribunal's order, allowed the writ petition, and directed the Tribunal to consider the appeal and stay application in accordance with the law. The judgment emphasizes the importance of considering the specific circumstances of a case, such as the company's status and operational challenges, in determining whether to condone a delay in filing an appeal.