2008 (3) TMI 213 - HC - Central Excise

Constitutional validity of the proviso to Section 35(1) as it provides that the power of the Commissioner (Appeals) to condone the delay in filing the appeal beyond the period of 60 days is confined to delay for a further period of 30 days only - Parliament has provided for the limitation period of 60 days for filing an appeal before the Commissioner there is nothing unreasonable on part of Parliament in providing that limitation period hence validity of section 35 cannot be challenged

Summary

Issues Involved:
1. Constitutional validity of the proviso to sub-section (1) of Section 35 of the Central Excise Act, 1944.
2. Discrimination between different classes of assessees regarding the period of limitation and power to condone delay.
3. Justification for different periods of limitation and powers of condonation for appeals before the Commissioner (Appeals) and the Appellate Tribunal.
4. The scope of writ jurisdiction under Article 226 of the Constitution in extraordinary cases.

Issue-wise Detailed Analysis:

1. Constitutional Validity of the Proviso to Sub-section (1) of Section 35 of the Central Excise Act, 1944:
The petitions challenged the proviso to sub-section (1) of Section 35, which restricts the Commissioner (Appeals) to condone delays in filing appeals to a maximum of 30 days beyond the initial 60-day period. The petitioners argued that this provision violates Article 14 of the Constitution by creating artificial classes among assessees and imposing arbitrary restrictions.

2. Discrimination Between Different Classes of Assessees:
The petitioners contended that the Act creates two artificial classes: those appealing to the Commissioner (Appeals) and those appealing to the Appellate Tribunal. The former has a shorter period of 60 days to file an appeal and a limited condonable period of 30 days, while the latter has a 90-day period with unlimited condonable delay. This, according to the petitioners, results in hostile discrimination without a rational basis.

3. Justification for Different Periods of Limitation and Powers of Condonation:
The court reviewed the legislative history and rationale behind the different periods and powers. It was noted that the Parliament, through various amendments, aimed to ensure early disposal of appeals and certainty in tax recovery. The court emphasized that the right to appeal is a statutory right, which can be circumscribed by conditions, including specific periods of limitation and condonable delays. The court found that assessees appealing to the Commissioner (Appeals) and those appealing to the Appellate Tribunal do not belong to the same class due to differences in the locations and operational jurisdictions of these bodies.

4. Scope of Writ Jurisdiction Under Article 226 in Extraordinary Cases:
The court acknowledged that there might be extraordinary cases where assessees could not file appeals within the stipulated 90 days due to circumstances beyond their control. In such cases, the court suggested that assessees could invoke the writ jurisdiction under Article 226 to seek relief, provided they demonstrate extraordinary circumstances and gross injustice.

Conclusion:
The court upheld the constitutional validity of the proviso to sub-section (1) of Section 35, stating that the differentiation in periods of limitation and powers of condonation is justified and not arbitrary. The court dismissed the petitions challenging the provision but granted liberty to the petitioners to file fresh writ petitions under Article 226 to challenge the orders-in-original in extraordinary cases. The rule was discharged, and the petitions were dismissed.