2019 (8) TMI 790 - HC - Customs

Condonation of delay in filing petition - delay incurred in the process of gathering information from its marketing location covering different Land Customs Station - no order was passed giving reasons to denied condonation - powers vested under Rule 17 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 -sufficient reasons for condonation of delay or not - HELD THAT - On perusal of the file, we were surprised to note that no formal order was passed in this regard although the consideration of condonation application and its disposal was a quasi judicial discharge by the Commissioner of Central Excise. There is no contest on merits of the claim as well as on the entitlement of the petitioner to seek a brand rate rather the only impediment on such relief is the delay whatsoever. In other words, if the delay is condoned, the relief is consequential. It is through a file noting and a simple query by the Commissioner as to the grounds for condonation which has been interpreted as a rejection of the application. The file noting confirms that the Commissioner has simply noted that a condonation can be considered where an applicant had provided adequate evidence of being prevented by sufficient cause in filing the application within the prescribed time but if no reason has been cited then on what grounds the condonation can be granted - other lacuna of the proceeding is that in case the Commissioner was not satisfied on the reasons assigned by the petitioner in his condonation application, he should have afforded an opportunity to the petitioner to clarify the position but certainly the manner of disposal of the condonation application leaves much to be desired. The remarks of the Commissioner on the condonation application would not amount to rejection of the condonation application in absence of any order to such effect. Besides, the fact that such remark was interfered by the Commissioner (Appeals) to find merit in the explanation to the delay given by the petitioner coupled with the revised time limit under the Circular dated 24.6.2010, the order of the Joint Secretary dated 16.11.2015 in purported exercise of revisional jurisdiction impugned at Annexure-5 together with letter dated 03.05.2017 of the Under Secretary, Government of India in its Ministry of Finance impugned at Annexure-7 are on complete misappreciation of the legal position and are accordingly quashed and set aside. Petition allowed.

Summary

Issues Involved:
1. Rejection of the application for condonation of delay.
2. Reversal of the order by the Joint Secretary, Government of India.
3. Maintainability of the application for fixation of brand rate.

Detailed Analysis:

Rejection of the Application for Condonation of Delay:
The petitioner, a public sector undertaking engaged in the manufacture of petroleum products, filed an application on 29.06.2010 for fixation of brand rate under the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 (Drawback Rules). The application was delayed, and the petitioner sought condonation of this delay on 18.08.2010. The Joint Commissioner, Central Excise and Service Tax, Patna, rejected this application on 08.08.2011, citing the Commissioner’s refusal to condone the delay. The petitioner argued that the delay was due to the time taken in gathering information from various marketing locations. The Court found that the Commissioner did not provide a formal order rejecting the condonation application, and his query about the grounds for condonation was misinterpreted as a rejection. The Court criticized the mechanical rejection and lack of a formal order, emphasizing that the petitioner should have been given an opportunity to clarify the reasons for the delay.

Reversal of the Order by the Joint Secretary, Government of India:
The petitioner’s appeal was initially allowed by the Commissioner (Appeals) on 11.10.2012, who found merit in the reasons for the delay and condoned it. However, the Joint Secretary, Government of India, reversed this decision on 16.11.2015, holding that the application for brand rate fixation was time-barred. The Court noted that the Joint Secretary’s decision was based on the erroneous premise that the Circular dated 24.06.2010, which revised the time limits for filing applications under the Drawback Rules, did not apply retrospectively. The Court clarified that the revised time limits were applicable to the petitioner’s case, as the application was filed within the extended period allowed by the amended rules. The Court also highlighted that the Joint Secretary, being of the same rank as the Commissioner (Appeals), had no authority to exercise revisional jurisdiction, making the reversal legally unsustainable.

Maintainability of the Application for Fixation of Brand Rate:
The petitioner’s application for fixation of brand rate for April 2010 was initially held not maintainable by the Joint Commissioner on 2/5.07.2010 due to deficiencies in the application. The petitioner resubmitted a revised application on 23.07.2010, which was acted upon. The Court found that the deficiencies were removed, and the application was entertained. The Commissioner (Appeals) noted that the export was not in dispute, and the delay was within the condonable period. The Court emphasized that the revised time limit under the Circular dated 24.06.2010 should be applied, making the application maintainable. The Court quashed the orders dated 16.11.2015 and 03.05.2017, reinstating the Commissioner (Appeals)’s decision to allow the petitioner’s claim.

Conclusion:
The Court allowed the writ petition, quashing the impugned orders and directing that the petitioner’s claim be processed within three months. The Court returned the records to the department for further action.