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2019 (2) TMI 941 - HC - Central ExciseCondonation of delay of 121 days in filing the appeals - power of the CCE(A) to condone the delay - whether the assessee was entitled to file writ petitions challenging the said common Order-in-Original dated 29.2.2016 after having lost before this Court in CMA.Nos.1691 to 1700 of 2018 dated 07.8.2018, by which, the appeals filed by the assessee were dismissed confirming the orders passed by the Tribunal, which upheld the decision of the CCE(Appeals) rejecting the appeals filed by the assessee as barred by limitation? - Held that - An identical issue was considered by the Hon'ble Full Bench of the Andhra Pradesh High Court in the case of Electronic Corporation of India Limited 2018 (3) TMI 767 - TELANGANA ANDHRA PRADESH HIGH COURT wherein a reference was made by a Division Bench to the Full Bench raising a question as to whether the decisions of the Division Bench in the case of M/s.Resolute Electronics Private Limited Vs. Union of India 2015 (4) TMI 422 - ANDHRA PRADESH HIGH COURT and in the case of Star Enterprises Vs. Joint Commissioner, Guntur 2015 (4) TMI 40 - ANDHRA PRADESH HIGH COURT require reconsideration. In the decision in the case of Electronic Corporation of India Limited, the first question was answered against the assessee thereby holding that the period of limitation provided under Section 35 of the Act can be extended only upto 30 days as provided by the Proviso and it cannot be extended beyond 90 days. Statutory remedy or appeal under Section 35 of the Act - Held that - Admittedly, the assessee, while responding to the show cause notices, which we find as periodical notices, did not specifically canvass the issue, which they raised in the writ petitions namely challenging the jurisdiction of the Authority to impose equal penalty for the period from March 2008 to March 2010. Secondly, the assessee did not raise the contention, which was raised in the writ petitions stating that equal penalty could not have been imposed for the period from 01.4.2010 to 31.1.2015 since there is no allegation in the show cause notices that there is any willful misstatement, fraud, collusion, etc with an intention to evade payment of duty. We find that while replying to the show cause notices, the assessee canvassed the merits of the matter stating that the demand itself is not maintainable - the issue, which has been raised by the assessee before us and in the writ petitions, touches upon the jurisdiction of the Adjudicating Authority to impose equal penalty for the period upto 31.3.2010 and whether circumstances warrant imposition of equal penalty post 31.3.2010. Thus, for the period from 01.4.2010, mens rea requires to be established to impose equal penalty. In our considered view, the issues as to whether equal penalty was imposable or in other words, whether the Adjudicating Authority had jurisdiction to impose equal penalty for the period prior to 31.3.2010 and as to whether facts warranted imposition of equal penalty for the period from 01.4.2010 are definitely issues touching upon the jurisdiction of the Authority to take a decision in the matter - thus, the assessee has made out a case for interference of the said common Order-in-Original in exercise of the powers under Article 226 of The Constitution of India, as we are prima facie satisfied that the Adjudicating Authority assumed jurisdiction, which has been shown to be not in existence for the period upto 31.3.2010. Petition allowed.
Issues Involved:
1. Jurisdiction of the Adjudicating Authority to impose equal penalty for the period from March 2008 to March 2010. 2. Imposition of equal penalty for the period from April 2010 to January 2015. 3. Maintainability of writ petitions challenging the common Order-in-Original after the statutory appeal period had lapsed. 4. Condonation of delay in filing appeals before the Commissioner of Central Excise (Appeals-II). 5. Jurisdiction of the High Court under Article 226 of the Constitution of India to entertain writ petitions in such cases. Detailed Analysis: 1. Jurisdiction of the Adjudicating Authority to Impose Equal Penalty for the Period from March 2008 to March 2010: The assessee contended that under Rule 15(3) of the CENVAT Credit Rules, 2004, as it stood until March 31, 2010, the maximum penalty that could be imposed was ?2,000, and there was no provision for imposing an equal amount of penalty for cases involving fraud, suppression, etc. The court agreed with this contention, noting that the Adjudicating Authority had assumed jurisdiction not in existence for that period, thus making the imposition of equal penalty for this period invalid. 2. Imposition of Equal Penalty for the Period from April 2010 to January 2015: For the period after April 1, 2010, Rule 15(3) was amended to allow for the imposition of equal penalty in cases of fraud, collusion, willful misstatement, or suppression of facts with intent to evade payment of service tax. The assessee argued that none of the show cause notices alleged such misconduct, making the imposition of equal penalty unwarranted. The court found merit in this argument, emphasizing that the Adjudicating Authority failed to establish mens rea, a necessary condition for imposing equal penalty under the amended Rule 15(3). 3. Maintainability of Writ Petitions: Despite the assessee's failure to file appeals within the statutory period, the court considered whether the writ petitions challenging the Order-in-Original were maintainable. The court referred to the Full Bench decisions of the Andhra Pradesh High Court in Electronic Corporation of India Limited and the Gujarat High Court in Panoli Intermediate (India) Private Limited, which allowed writ petitions under Article 226 in cases where the Adjudicating Authority acted without jurisdiction, in excess of jurisdiction, or in violation of principles of natural justice. The court found that the issues raised by the assessee fell within these categories, thus making the writ petitions maintainable. 4. Condonation of Delay in Filing Appeals: The court noted that the Commissioner of Central Excise (Appeals-II) had correctly held that he had no power to condone the delay beyond the statutory period of 90 days, as established by multiple judicial decisions. The Tribunal and the Division Bench of the High Court had also upheld this view, affirming that the statutory time limit for filing appeals could not be extended. 5. Jurisdiction of the High Court under Article 226: The court acknowledged that its jurisdiction under Article 226 is discretionary and not to be exercised as a matter of right. However, given that the issues raised by the assessee pertained to the jurisdiction of the Adjudicating Authority, the court found it appropriate to exercise its jurisdiction to address these concerns. The court emphasized that the assessee should not be foreclosed from raising jurisdictional issues, even if they were not initially canvassed in their replies to the show cause notices. Conclusion: The High Court allowed the writ appeals and set aside the common Order-in-Original dated February 29, 2016, insofar as it imposed equal penalty for the periods from March 2008 to March 2010 and from April 2010 to January 2015. The matters were remanded to the Adjudicating Authority for a fresh decision on the imposition of penalty, with the assessee given 15 days to file objections. The Adjudicating Authority was directed to take a fresh decision on merits and in accordance with the law, uninfluenced by the observations in this judgment. No costs were imposed, and the connected CMPs were closed.
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