2018 (2) TMI 1674 - HC - Central Excise

Condonation of delay in filing appeal - Whether Appellate Tribunal was justified in not condoning the delay in filing the Appeal before the Appellate Tribunal without appreciating that reason given by the Appellant was justified and there was no mala fide reasons or dilatory tactics involved in causing the delay? Held that - the Tribunal could not have faulted the assesses. The assesses acted bonafide and under legal advise. There was nothing intentional about the act attributed to the appellants-assesses. Thus there was no gross negligence, utter callousness or malafides and the delay in filing the appeal was properly explained. In these circumstances the liberal principles should have been applied to condone the delay. Delay is condoned - the appeal shall stands restored to the file of the Tribunal and to be decided on merits.

Summary

Issues:
Delay in filing the Appeal before the Appellate Tribunal - Condonation of delay.

Analysis:
The appellant, engaged in the business of manufacturing Sorbitol Liquid Glucose, faced allegations of collecting additional amounts from customers in the name of freight charges without discharging central excise duty. A show cause notice was issued, leading to an order confirming the demand. Despite filing a detailed reply and subsequent appeals, including a writ petition challenging an order of pre-deposit, the appeal was dismissed by the Commissioner (Appeals). The appellant then sought condonation of delay in filing an appeal before the Customs Excise & Service Tax Appellate Tribunal (CESTAT), which was refused. The High Court observed that the assesses acted bona fide, with no intentional wrongdoing, gross negligence, or malafides. The Court criticized the hyper-technical view taken by the Tribunal and emphasized that liberal principles should have been applied to condone the delay.

In the judgment, it was highlighted that the assesses were entitled to exclude the period spent in pursuing the writ petition filed in the High Court from the calculation of the limitation period for filing the appeal before CESTAT. The Court, while setting aside the impugned order and condoning the delay, directed the assesses to pay costs of ?25,000 to the Revenue in both appeals. The payment of costs was made a condition precedent for the appeal to be restored to the Tribunal's file and decided on merits in accordance with the law. The Court's decision aimed at balancing the interests of justice while acknowledging the assesses' legitimate grounds for seeking condonation of delay and emphasizing the application of liberal principles in such cases.