2019 (2) TMI 1448 - HC - Central Excise

Rectification application - condonation of delay - time limitation - Section 35 C of the Central Excise Act - principles of Natural Justice - Held that - There is a little room for doubt that the Tribunal would have inherent power to recall its order (rectify) if sufficient cause is shown for the delay in approaching it - reliance placed in the case of SUNITADEVI SINGHANIA HOSPITAL TRUST VERSUS UNION OF INDIA 2008 (11) TMI 249 - SUPREME COURT OF INDIA , where it was held that The Tribunal failed to take into consideration that, ipso facto, in a case of this nature provisions of Section 129B of the Customs Act as such has no effect. Clearly the Tribunal fell in error by not noticing the decision of the Hon'ble Supreme Court recorded in Sunita Devi Singhania's case - matter remitted back to the Tribunal to decide the issue afresh.

Summary

Issues:
1. Whether the CESTAT has the power to condone delay in filing rectification application under Section 35 C of the Central Excise Act?
2. Whether the CESTAT followed the law laid down by the Hon'ble Supreme Court in "Sunita Devi Singhania Hospital Trust vs. UOI 2009 (233) ELT 295 SC"?

Analysis:

The appeal before the High Court challenged the Tribunal's decision to decline rectification of its own order due to a delay of 7 days beyond the prescribed period of six months. The questions of law raised included the power of the CESTAT to condone such delays and whether the Tribunal followed the precedent set by the Supreme Court in the "Sunita Devi Singhania Hospital Trust vs. UOI 2009" case. The Supreme Court in the cited case emphasized the Tribunal's inherent power to recall its order if sufficient cause is shown, despite the specified limitation period. The Court noted that principles of natural justice required the Tribunal to have the power to rectify its mistakes for effective justice between parties.

The High Court analyzed the Supreme Court's judgment and found that the Tribunal had erred in not considering the principles outlined in the precedent. The Tribunal, based on a decision by the Karnataka High Court, wrongly concluded that it lacked the power to condone the delay. The High Court, however, clarified that the Tribunal indeed possessed the inherent power to recall its order for rectification if a sufficient cause for the delay was shown. Therefore, the High Court set aside the impugned order and remitted the matter back to the Tribunal for a fresh decision in accordance with the principles laid down by the Supreme Court.

In conclusion, the High Court answered the questions of law framed in the appeal by affirming the CESTAT's power to condone delays and directing the Tribunal to reconsider the issue in light of the Supreme Court's precedent. The judgment highlighted the importance of adhering to principles of natural justice and ensuring that parties have a fair opportunity to rectify errors and seek justice within a reasonable timeframe.