2008 (9) TMI 35 - AT - Central Excise

Department s application for condonation of delay of 372 days delay caused because of bleated constitution of Review Committee Negligence behavior of dept. in dealing the litigation not a rational reason of delay impugned orders initially accepted by revenue and right to appeal is foregone delay cannot be condoned

Issues Involved:

1. Time-barred Appeals
2. Condonation of Delay
3. Constitution of Review Committee
4. Acceptance of Orders and Grant of Refunds
5. Adequate Explanation for Delay
6. Public Accountability and Good Governance

Issue-wise Detailed Analysis:

1. Time-barred Appeals:
The Revenue filed two appeals against orders dated 12-5-2006 and 27-2-2007 by the learned Commissioner (Appeals), which were served on the Revenue on 31-5-2006 and 13-3-2007, respectively. According to Section 35B(3) of the Central Excise Act, 1944, the appeals should have been filed within three months, i.e., by 31-8-2006 and 12-6-2007. However, the appeals were filed on 6-9-2007, making them time-barred.

2. Condonation of Delay:
The Revenue filed applications for condonation of delay nine months after filing the appeals. The applications did not specify the number of days of delay and attributed the delay to the belated constitution of the Review Committee by the Central Board of Excise & Customs (CBE&C). The Tribunal found that the applications were filed in a routine and casual manner without stating "sufficient cause" for the delay, as required under Section 35B(5) of the Act.

3. Constitution of Review Committee:
The delay was attributed to the absence of a Review Committee, as required by Section 35B(2) of the Act. The affidavits filed by the Board indicated that the Judicial Cell of CBE&C was aware of the need for a review committee as early as 30-6-2006 but took no action until 20-3-2007. The Tribunal found that the Board's inaction and the belated constitution of the committee did not constitute "sufficient cause" for the delay.

4. Acceptance of Orders and Grant of Refunds:
The Commissioner, Bhubaneswar-II, accepted the impugned orders on 25-8-2006 and 11-4-2007, leading to the grant of refunds on 3-11-2006 and 11-5-2007. The Tribunal noted that the acceptance of the orders and subsequent refunds indicated that there was no cause for filing an appeal initially.

5. Adequate Explanation for Delay:
The Tribunal emphasized that "sufficient cause" must exist before the expiration of the limitation period. The affidavits and delay condonation applications failed to provide a plausible explanation for the delay. The Tribunal cited various judgments, including the Supreme Court's decision in Ajitsingh Thakursingh and Another v. State of Gujarat, which held that events or circumstances arising after the expiry of the limitation period do not constitute "sufficient cause."

6. Public Accountability and Good Governance:
The Tribunal highlighted the need for public accountability and timely action by the authorities. It noted that the inordinate delay in filing appeals was due to the failure of the Board to make timely appointments of senior officials, leading to non-functioning review committees. The Tribunal referred to the observations of the Bombay High Court in Ornate Traders Private Limited & Others v. The Income Tax Officer & Others, emphasizing the duty of the authorities to act timely and responsibly to safeguard public revenue.

Conclusion:
The Tribunal dismissed the applications for condonation of delay, the stay petitions, and the appeals, citing the lack of "sufficient cause" for the delay and the failure of the authorities to act in a timely and responsible manner. The Tribunal also emphasized the need for public accountability and good governance in tax administration.

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