2019 (7) TMI 1345 - HC - Central Excise

Compliance with the pre-deposit - Section 35 of the Central Excise Act - power to condone delay - HELD THAT - The conceded position is that Petitioner made pre-deposit of 7.5% of duty as required under Section 35F of the Act well within normal period of limitation. The appeal was sent through Courier within limitation period, however, Courier Agency did not deliver appeal within limitation period rather returned the same to counsel of the Petitioner who had handed over appeal to Courier, as is evident from the affidavit dated 08.07.2016 (P-9). There is delay of 47 days and Commissioner (A) was competent to condone delay up to 30 days. The demand is not prima facie sustainable whereas if present petition is dismissed, the Petitioner would be liable to pay duty, interest and penalty which otherwise is not payable but for the delay - Having regard to the fact that delay is minor coupled with the fact that pre-deposit was made within time, therefore, there is no lapse on the part of Petitioner and demand is not prima facie maintainable, the present petition deserves to be allowed and accordingly is allowed. Petition allowed.

Summary

Issues:
1. Quashing of Order-in-Appeal dated 03.01.2017
2. Demand of Central Excise Duty and penalty confirmation
3. Delay in filing appeal
4. Correct classification of paddy parboiling plant
5. Power of Commissioner (A) to condone delay
6. High Court's jurisdiction under Article 226

Issue 1: Quashing of Order-in-Appeal dated 03.01.2017
The petitioner filed a Writ Petition under Article 226 seeking to quash the Order-in-Appeal dated 03.01.2017, which dismissed the appeal on the ground of delay. The petitioner also sought quashing of the Order-in-Original dated 21.03.2016 confirming the demand of Central Excise Duty along with penalty.

Issue 2: Demand of Central Excise Duty and penalty confirmation
The respondent issued a Show Cause Notice proposing the classification of the parboiling plant under a specific chapter heading and demanding Central Excise Duty for a certain period. The Additional Commissioner confirmed the demands and imposed penalties under relevant rules.

Issue 3: Delay in filing appeal
The petitioner faced a delay in filing the appeal due to the non-delivery of the courier containing the appeal documents to the office of the Commissioner (A). Despite filing an application seeking condonation of delay, the appeal was dismissed by the Commissioner (A) on the grounds of delay.

Issue 4: Correct classification of paddy parboiling plant
The petitioner argued about the correct classification of the paddy parboiling plant, citing circulars and pending cases before the Supreme Court. Reference was made to judgments in similar cases where appeals were allowed despite delay.

Issue 5: Power of Commissioner (A) to condone delay
The Commissioner (A) was held to have no power to condone delay beyond a specified period. However, the High Court noted that it could intervene under Article 226 to prevent miscarriage of justice and secure the ends of justice.

Issue 6: High Court's jurisdiction under Article 226
The High Court, citing relevant judgments, held that it could condone delay to prevent miscarriage of justice and ensure fairness. The Court referred to the inherent power vested in it under Article 226 to set aside orders and remand matters if there is a possibility of injustice.

In conclusion, the High Court allowed the petition, quashed the Order-in-Appeal, and restored the appeal to its original number for further consideration by the Commissioner (A) on merits. The Court emphasized the importance of preventing injustice and ensuring fair proceedings, even if the statutory authority lacked the power to condone delay beyond a certain period.