2022 (12) TMI 226 - AT - Central Excise

Rectification of mistake - error apparent on the face of record or not - factum of deposit of duty prior issuance of the Show Cause Notice was never brought to the notice of this Tribunal - delay in filing recitication application - Time Limitation - HELD THAT - The fact of deposit has not been recorded in the final order. In fact, even the acknowledgement of the Department of the deposit was not recorded in the said order. We further observe that the appellant had not challenged the aforesaid order prior to 18th July, 2018 when the appeal against the said order was filed before Hon ble High Court of Rajasthan. It is apparent that this application itself was filed much beyond the period prescribed for the same i.e. after more than six months of the aforesaid final order. The statute i.e. Section 35 D of Central Excise Act/ Section 129 of Customs Act, 1962 prescribes a period of six months from the date of the order rectification whereof is prayed. In the present case, we do accept that date of order of Hon ble Rajasthan High Court is the relevant date for the said period of limitation to begin with. But we fail to understand as to how the said period can be allowed to be extended beyond the said period of six months. The application for rectification of mistake, to our opinion, is beyond the period of limitation as per the generic law on the aspect of limitation - The words 'sufficient cause' in Section 5 of Limitation Act should receive a liberal construction so as to advance substantial justice, only when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the appellant as was held by Hon ble Supreme Court in the case of PERUMON BHAGVATHY DEVASWOM, PERINADU VILLAGE VERSUS BHARGAVI AMMA (DEAD) BY LRS ORS. 2008 (7) TMI 836 - SUPREME COURT . There has been a substantial delay on part of the applicant firstly in challenging the final order of 22.12.2017 before Hon ble High Court of Rajasthan and subsequently, a substantial delay in filing this application pursuant to the order of Rajasthan High Court dated 25.08.2021. The only explanation for such delay at every stage is the time taken by applicant in consultation with his Counsel. Even the name of the Counsels engaged for those consultations is not mentioned in the application. The reason given reflects the negligent and casual attitude of the applicant. Though Tribunal can take suo moto action for rectification of mistake and the application for the same can be filed at any time but it should reflect the reasons for causing the delay - The application in hand in both the appeals is hereby dismissed.

Summary

Issues:
Delay in filing application for rectification of mistake in final order.

Analysis:
The judgment addressed the issue of delay in filing an application for rectification of mistake in the final order. The applicant sought condonation of delay, citing the deposit of duty before the issuance of the Show Cause Notice, which was not disputed by the Department. The applicant had filed an appeal before the High Court, which admitted the appeal acknowledging the duty deposit. The Tribunal observed that the final order did not record the deposit of duty, and the application for rectification was filed much beyond the prescribed period. The application was filed after more than 9 months of the High Court's order, exceeding the statutory limitation of six months.

The Tribunal considered the principles of condonation of delay, emphasizing the need for a reasonable explanation showing sufficient cause for the delay. While liberal approach is favored, the delay should not be due to dilatory tactics or negligence. Referring to legal precedents, the Tribunal highlighted that delay cannot be condoned as a matter of right and must be justified with bona fide reasons. The judgment cited cases where delay condonation was granted based on sufficient cause and rejected when explanations were unsatisfactory.

The Tribunal also discussed the importance of adhering to statutory limitations, emphasizing the need to interpret provisions to achieve the legislative intent and prevent rendering them ineffective. The judgment underscored that delay, even of one day, must be adequately explained, as upheld by higher courts. The applicant's vague explanation, citing consultation with counsel without specifics, was deemed negligent and casual, reflecting a lack of diligence. The Tribunal emphasized that the law of limitation must be applied rigorously, even if it harshly affects a party.

Ultimately, the Tribunal dismissed the application in both appeals, as the delay in challenging the final order and filing the rectification application was not satisfactorily explained. The judgment highlighted that the Tribunal can rectify mistakes suo moto, but the reasons for delay must be clear. In this case, the lack of a reasonable explanation for the substantial delays led to the dismissal of the application for rectification of mistake in the final order.