2014 (9) TMI 220 - HC - Central Excise

Condonation of delay in filing appeal before commissioner (Appeals) - good case on merit - Denial of refund claim - Refund sanctioned at first instance - Later sanctioned refund declared errornoeus - Held that - In the first round of litigation present petitioner was refunded the amount by way of order-in-original. The respondents have also not disputed the fact that the petitioner has extremely good case on merit. We also need to record the fact that the petitioner while challenging the order impugned before the Commissioner (Appeals) not only had preferred the application for condonation of delay, but, had also substantiated the same grounds with sufficient and acceptable grounds for condoning such delay and thus has explained sufficiently from the beginning such delay. It is a different aspect that appellate forums are bound by the law on the issue. Thus the total length of delay being very small and with extremely good ground on merit to sustain, we are of the opinion that non-interference at this stage would cause gross injustice to the petitioner. Therefore, we need to step in by invoking extraordinary jurisdiction. Such powers are required to be exercised very sparingly and in event of extraordinary circumstances in an appropriate case where otherwise we would fail in our duty that such powers are needed to be invoked. We are therefore, of the opinion that orders impugned and appellate forums dated 7-1-2011 and 18-12-2009 though not be interfered with and yet the impugned order of Order-in-Original dated 23-2-2009 requires to be quashed and set aside. Decided in favour of assessee.

Summary

Issues:
Petitioner seeks writ of Certiorari to quash Order-in-Original and Order-in-Appeal, stay recovery pending petition, grant interim relief, and pass appropriate orders. The main issue involves the rejection of the petitioner's appeal on the ground of limitation by the Commissioner (Appeals) and the Tribunal.

Detailed Analysis:

1. Refund Claim and Adjudication Process:
The petitioner filed a refund claim of Rs. 1 lakh based on an inquiry related to excess duty drawback payment. The Assistant Commissioner sanctioned the refund, but the Commissioner (Appeals) later allowed the departmental appeal, leading to a challenge before CESTAT. The Tribunal set aside the Commissioner's decision, resulting in a fresh show cause notice for recovery of the refund amount.

2. Condonation of Delay:
The petitioner challenged the recovery order before the Commissioner (Appeals) after a delay of five months. The Commissioner rejected the appeal citing a delay exceeding the statutory limit of 30 days under Section 35 of the Central Excise Act. The Tribunal upheld this decision, relying on the Singh Enterprises case, which limited the condonation period to 30 days.

3. Judicial Review and Extraordinary Jurisdiction:
The petitioner contended that the authorities should have considered the merits of the case instead of solely focusing on the limitation issue. The High Court recognized its extraordinary powers under Article 226 to intervene in cases of extreme hardship or injustice. Citing previous judgments, the Court emphasized the need for sparing exercise of such powers.

4. Decision and Relief Granted:
After considering submissions from both sides, the High Court found that the petitioner had a strong case on merit and had provided acceptable grounds for condoning the delay. The Court invoked its extraordinary jurisdiction to quash the Order-in-Original dated 23-2-2009, emphasizing the need to prevent gross injustice to the petitioner. The petitioner's request for interest on the refund was not entertained, and the petition was allowed accordingly.

This detailed analysis highlights the legal journey of the petitioner seeking relief through the High Court's extraordinary jurisdiction due to the rejection of their appeal on technical grounds of limitation, ultimately resulting in the quashing of the impugned order.