2018 (10) TMI 1768 - HC - Central Excise

Condonation of delay of 2059 days in filing the appeal before the Tribunal - appeals to the Appellate Tribunal - Section 86 of the Finance Act 1994 - sufficient explanation for condonation of delay given or not - HELD THAT - In the present case all that the appellant had stated as explanation for the inordinate delay of five years in preferring the appeal is that the Managing Director had sent a copy of the order to the advocate for filing the appeal but the advocate had not filed the appeal in time. No explanation is furnished by the appellant as to why no follow up action was taken by the Managing Director of the appellant. The explanation furnished by the appellant that the matter could not be followed up with the advocate because of difference in management is vague and the Tribunal found it unacceptable. The present appeal is preferred against the order of the Tribunal refusing to exercise discretion to condone the delay - As we are satisfied that such exercise of discretion does not suffer from any error much less an error which gives rise to a substantial question of law we see no reason to exercise discretion to interfere - It would be wholly inappropriate for us for the first time in proceedings under Section 35G of the Central Excise Act to examine the appeal on its merits when the Tribunal has refused to entertain the appeal on the ground of inordinate delay in filing the appeal of around five years. Appeal dismissed.

Summary

Issues:
1. Condonation of delay in filing an appeal before the Appellate Tribunal.
2. Exercise of discretion by the Tribunal in refusing to condone the delay.
3. Jurisdiction of the CESTAT to condone delay in filing appeals.
4. Interpretation of Section 86(5) of the Finance Act.
5. Application of legal principles in condoning delays in filing appeals.

Issue 1: Condonation of delay in filing an appeal before the Appellate Tribunal

The appeal in question was filed with a delay of approximately five years, invoking Section 35G of the Central Excise Act against the order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The Tribunal dismissed the application for condonation of the delay, leading to the dismissal of the appeal as well. The appellant's justification for the delay, related to the Managing Director sending the order-in-original to the advocate for filing the appeal, was found insufficient and lacking in convincing evidence by the Tribunal.

Issue 2: Exercise of discretion by the Tribunal in refusing to condone the delay

The Tribunal, under Section 86(5) of the Finance Act, has the authority to admit an appeal even after the prescribed period if sufficient cause is shown. In this case, the Tribunal refused to exercise discretion to condone the delay of five years in filing the appeal, stating that the reasons provided were unsatisfactory. The High Court found that the Tribunal's refusal did not give rise to a substantial question of law warranting jurisdiction under Section 35G of the Central Excise Act.

Issue 3: Jurisdiction of the CESTAT to condone delay in filing appeals

Section 86(5) of the Finance Act empowers the CESTAT to condone delays beyond the stipulated period for filing appeals. The question here is not about the absence of jurisdiction but the validity of the Tribunal's exercise of discretion in refusing to condone the delay. The Tribunal, after examining the explanation for the delay, found it wholly unsatisfactory, leading to the refusal to condone the delay of 2059 days.

Issue 4: Interpretation of Section 86(5) of the Finance Act

The Tribunal's decision to not condone the delay was based on an assessment of the explanation provided by the appellant. The High Court upheld the Tribunal's decision, emphasizing that the explanation for the inordinate delay of five years was vague and unacceptable. The Court found no error in the Tribunal's exercise of discretion, indicating no substantial question of law to warrant interference.

Issue 5: Application of legal principles in condoning delays in filing appeals

Legal precedents were cited, such as the N. Balakrishnan case, to highlight the principles governing the condonation of delays in filing appeals. The Court differentiated cases where delays of varying lengths were condoned based on the sufficiency of the explanation provided. The importance of not rendering statutory appeal rights redundant due to technical grounds was emphasized, with a focus on the significance of providing satisfactory explanations for delays.

In conclusion, the High Court dismissed the appeal, stating that the Tribunal's refusal to condone the delay did not warrant interference. The Court highlighted the importance of providing valid and satisfactory explanations for delays in filing appeals and upheld the Tribunal's decision in this case. The judgment focused on the legal principles governing the condonation of delays and the exercise of discretion by the Tribunal in such matters.