2015 (2) TMI 744 - HC - Central Excise

Condonation of delay in appeal- Sufficient reason for delay- Held that - The application seeking condonation of delay mentions that there was a vacancy in the office of the concerned legal officer and that is why the delay occurred. Before the Tribunal, it appears that the argument proceeded on the vacancy in the department of Finance and Accounts and particularly of the level of Manager. That Government departments and particularly on account of outsourcing of several functions are working with depleted staff strength. Similar is the position of the Maharashtra State Electricity Distribution Company Limited. Though the original Board has been divided and on functional lines, limited company has been established, yet, full staff strength has not been achieved. Similarly, in matters of taxation and particularly in Service Tax, there was somebody who could have applied his mind jointly with the legal department. The Finance and Accounts Manager is a crucial post. Its vacancy during the relevant period was, in the given facts and circumstances, a vital element and factor. It is not as if the reason was found to be false or the Appellant was totally negligent and callous or has ignored the legal proceedings completely. In such circumstances, by imposition of costs, the discretion could have been exercised in favour of a statutory entity and authority like the Appellant before us. In the light of the above discussion, we proceed to condone the delay in filing of the statutory Appeals on condition that the Appellant/original Applicant in both Appeals before us shall deposit costs quantified at ₹ 25 ,000 /-. The costs quantified in both Appeals shall be paid to the Respondent within a period of 4 weeks from today.On the proof of the costs deposited being produced, the Tribunal shall restore the Appeals and the stay applications to its file. Decided conditionally in favour of appellant.

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal on condonation of delay, stay application, and pre-deposit.

Analysis:
The Maharashtra State Electricity Distribution Company Limited contested the order of the Customs, Excise and Service Tax Appellate Tribunal, arguing that there was a substantial question of law arising from the Tribunal's decision. The Tribunal had dismissed the condonation of delay application, despite legitimate reasons provided. The company highlighted a vacancy in the position crucial for decision-making, leading to the delay. The company's explanation for the 579-day delay was considered satisfactory, emphasizing the genuine grounds for the delay.

The Revenue's counsel contended that there was no substantial question of law in the factual findings and that lack of knowledge or staff shortages cannot justify condoning the delay. The Revenue argued that the delay could have been avoided by escalating matters to higher authorities despite the vacancy in a specific position. The factual findings were deemed not to raise any substantial legal question by the Revenue.

Upon reviewing the orders and applications, the Court acknowledged the importance of the vacant Finance and Accounts Manager position during the delay period. The Court noted the challenges faced by government departments and entities due to staff shortages, emphasizing the significance of the vacant managerial position in the context of legal proceedings. The Court found that the Tribunal erred in refusing to condone the delay, concluding that the discretion was not exercised fairly. This constituted a substantial question of law warranting the admission of the Appeals, which were subsequently admitted and disposed of with the consent of both parties.

The Court decided to condone the delay in filing the statutory Appeals on the condition that the company deposits costs amounting to Rs. 25,000 within four weeks. The Appeals would be restored upon proof of cost deposition, allowing the company to pursue legal reliefs. The Court emphasized that no further extensions would be granted for payment and that cooperation with the Tribunal for early resolution was expected. The proceedings were concluded with all contentions kept open for both parties on the stay applications and Appeals.