2008 (1) TMI 70 - HC - Central Excise

Appellant-State has given sufficient reasons for condoning the delay of 778 days & Tribunal was not justified in dismissing both the application for condonation of delay on the ground that as per Sec. 35(B), Tribunal has power to condone the delay within the period of limitation by the impugned order, a great injustice has been resulted to the appellant who is claiming the refund - fit case for condoning the delay

Issues Involved:
1. Whether the Tribunal was justified in dismissing the appeal on the ground of limitation under Section 35B of the Central Excise Act.
2. Whether the Tribunal erred in law by dismissing the application for condonation of delay due to insufficient cause.
3. Whether the Tribunal's refusal to condone the delay resulted in a miscarriage of justice.

Issue-wise Detailed Analysis:

1. Justification of Dismissing the Appeal on the Ground of Limitation:
The Tribunal dismissed the appeal filed by the appellant due to a delay of 778 days, citing Section 35B of the Central Excise Act. The Tribunal interpreted that it had the power to condone the delay only within the period of limitation. However, the High Court clarified that under subsections (3) and (5) of Section 35B, the Tribunal has the authority to admit an appeal even after the expiry of the limitation period if sufficient cause is shown. The High Court emphasized that the plain language of subsection (5) allows the Tribunal to condone delays beyond the limitation period, provided there are sufficient reasons.

2. Error in Dismissing the Application for Condonation of Delay:
The Tribunal dismissed the application for condonation of delay by stating that the reasons provided were insufficient. The High Court found this to be a non-speaking order, as the Tribunal did not elaborate on why the reasons were deemed inadequate. The appellant had detailed the procedural steps taken, including seeking legal opinions and delays caused by bureaucratic processes, which the Tribunal overlooked. The High Court referred to several Supreme Court judgments advocating for a liberal interpretation of 'sufficient cause' to advance substantial justice, especially in cases involving the state. The High Court concluded that the Tribunal did not properly consider the reasons provided for the delay.

3. Miscarriage of Justice Due to Refusal to Condon the Delay:
The High Court noted that the refusal to condone the delay would result in a miscarriage of justice, as the appellant was entitled to a refund of Rs. 16,03,311.50, which was paid in excess. The Tribunal's decision to dismiss the appeal on technical grounds without addressing the merits of the case was seen as unjust. The High Court emphasized that the appellant was not grossly negligent or acting in bad faith, and the delay was due to procedural and bureaucratic hurdles. The High Court cited several Supreme Court cases where delays were condoned to prevent failure of justice, especially when public interest was at stake.

Conclusion:
The High Court concluded that the Tribunal erred in its interpretation of Section 35B and in dismissing the application for condonation of delay without proper consideration. The delay of 778 days was condoned, and the Tribunal was directed to admit the appeal and decide it on merits. The parties were instructed to appear before the Tribunal on February 12, 2008.

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