COVID LIMITATION, PRE-SCN CONSULTATION AND CESTAT PHYSICAL HEARINGS

[Dr. Sanjiv Agarwal]

According to RBI’s latest bulletin, the Indian economy is poised to regain the ground lost to the pandemic and re-emerge as among the fastest growing countries in the world, supported by the decadal low interest rates, softening inflation and a modest current account surplus. The Indian economy is clearly differentiating itself from the global situation, which is marred by supply disruptions, stubborn inflation and surges of infections in various parts of the world, per article ‘State of the Economy’. The overall economic activity is on the cusp of a strengthening revival. The overall monetary and credit conditions stay conducive for a durable economic recovery to take root. Overall, the growth momentum in digital transactions over the past few months indicates that the economy is gradually shaking off the shackles of the second wave of the pandemic.

Supreme Court has finally decided on extended limitation owing to Covid guidelines. The Order dated 23.03.2020 was passed in view of the extraordinary health crisis. On 08.03.2021, the order dated 23.03.2020 was brought to an end, permitting the relaxation of period of limitation between 15.03.2020 and 14.03.2021. While doing so, it was made clear that the period of limitation would start from 15.03.2021. As the said order dated 08.03.2021 was only a one-time measure, in view of the pandemic, apex court was inclined to modify the conditions contained in the order dated 08.03.2021. The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed  under Section 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe periods(s) of limitation for instituting proceedings, outer limits (within which the Court of Tribunal can condone delay) and termination of proceedings.

CBIC has issued clarification in respect of Master Circular No. 1053 dated 10.03.2017 on the issue of pre-show cause notice consultation. It has been clarified that exclusion from pre show cause notice consultation is case specific and not formation specific.

CESTAT has issued a notice No. 1/2021 dated 15.11.2021 w.r.t. procedure for opting for physical hearings before Cestat w.e.f. November 29, 2021. Appeals may be heard in physical mode on requests made by appellant’s counsel. Accordingly, the system of physical hearing of Appeals for Division Bench matters will take place on Mondays and Fridays for now and the other appeals on Tuesdays, Wednesdays and Thursdays and is applicable to Principal Bench at Delhi only. On the remaining days, matters would be heard by virtual hearing mode as is now being done. With life coming to normal, it is expected that hearings adjudications etc may soon return to pre-Covid normalcy.

Covid impacted Limitation Period

In IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (11) TMI 387 - SC ORDER], apex court has issued four directions in present order. Firstly, period from 15.03.2020 till 02.10.2021 shall stand excluded for computing period of limitation for any suit, appeal, application or proceeding and balance period, if any, shall become available w.e.f. 03.10.2021. Secondly, if limitation period has expired between 15.03.2020 to 02.10.2021, then all persons would have 90 days period notwithstanding actual balance period of limitation remaining and if actual balance of limitation remaining on 013.10.2021 is higher than 90 days, then longer period would be available . Thirdly, in computing period under Arbitration and Conciliation Act, 1996, Commercial Courts Act, 2015 and Negotiable Instruments Act, 1881 and any other laws, period from 15.03.2020 till 02.10.2021 also stand excluded. Fourthly, Government of India shall amend guidelines for containment zones to, inter alia, allow regulated movement for filing time bound application for legal purpose.

The following are the relevant extracts:

“(I)  In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15-3-2020 till 2-10-2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15-3-2021, if any, shall become available with effect from 3-10-2021.

(II)   In cases where the limitation would have expired during the period between 15-3-2020 till 2-10-2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 3-10-2021. In the event the actual balance period of limitation remaining, with effect from 3-10-2021, is greater than 90 days, that longer period shall apply.

(III) The period from 15-3-2020 till 2-10-2021 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the Court or Trinunal can condone delay) and termination of proceedings.

(IV)  The Government of India shall amend the guidelines for containment zones, to State.

“Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements.”

Pre-show cause notice consultation

CBIC has issued the following clarification on pre-show cause notice consultation in view of earlier clarification vide Circular No. 1053 dated 10.03.2017 and Circular No. 1076 /2020-CX dated 19.11.2020:

• Exclusion from pro-show cause notice consultation is case-specific and not formation specific.
• Pre-show cause notice consultation shall not be mandatory for those cases booked under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 for recovery of duties or taxes not levied or paid or short levied or short paid or erroneously refunded by reason of:

1. fraud: or
2. collusion: or
3. willful misstatement: or
4. suppression of facts: or
5. contravention of any of the provision of the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 or the rules made there under with the intent to evade payment of duties or taxes.

(Source: Circular No. 1079/03/2021-CX dated 11.11.2021)

Cestat hearings in physical mode to resume

• CESTAT has issued a notice No. 1/2021 dated 15.11.2021 w.r.t. procedure for opting for physical hearings before Cestat w.e.f. November 29, 2021.
• Appeals may be heard in physical mode on requests made by appellant’s counsel.
• The system of physical hearing of Appeals for Division Bench matters will take place on Mondays and Fridays for now and the other appeals on Tuesdays, Wednesdays and Thursdays and is applicable to Principal Bench at Delhi only. On the remaining days matters would be heard by virtual hearing mode as is now being done.
• Any party desirous of getting an appeal heard physically may send a request, as prescribed firm to the Registry by e mail. Request forms received from Monday to Thursday will be listed for hearing as per roster in the following week in order of seniority, subject to a maximum of six matters a day.
• The appeal for which a request has been made for physical heanng, should otherwise be due for hearing m its normal turn or early hearing was allowed by separate order or as per the direction of higher courts.
• This shall come into effect from 29 November 2021.

(Source: Cestat Public Notice No. 1/2021 dated 15.11.2021)