2013 (7) TMI 568 - HC - Central Excise

Condonation of Delay of 825 days under Section 35 G of Central Excise Act, 1944 - Delay has occurred due to the fact that the appellant was prosecuting bonafide its application for rectification of mistake and thereafter the Writ Petition in this Court Held that - The only explanation offered for delay in the affidavit in support As per the decision of the Apex court in the case of Office of the Chief Post Master General v. Living Media India Ltd. & Anr., 2012 (4) TMI 341 - SUPREME COURT OF INDIA has while refusing to condone the delay, inter alia, observed Unless Government Instrumentalities have reasonable and acceptable explanation for the delay and there was a bonafide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural redtape in the process. Condonation of delay is an exception and should not be used as an anticipated benefit for the government departments In the instant case, the affidavit in support of the Motion does not give any explanation for the delay but merely states that the process takes reasonable time Decided in favor of Revenue. Credit of Additional Excise Duty (AED) utilised for payment of Basic duty of Excise - AED credit utilised was paid into the revenue through PLA and the original AED credit for payment of Basic Excise Duty was suo motu taken by the respondent Held that - Considered appropriate not to put any cap on the use of the AED (GSI) credit accruing prior to 1.3.2003 - In terms of the provisions enacted in Finance Act, 2004, the debits were held not amounting to payment of duty and the assessee was required to meet the same obligation by payment from PLA. In the instant case, the debits were held to be of no consequence when the assessee was required to pay duty initially discharged using AED (GSI) credit Decided against the Revenue. Hon ble Court in this matter is not inclined to condone the gross delay in filing the appeal Notice of motion is accordingly dismissed.

Summary

Issues:
1. Condonation of delay in filing Central Excise Appeal under Section 35G of the Central Excise Act, 1944.
2. Merits of the order of the CESTAT regarding the demand of an amount from the respondent-assessee.

Issue 1: Condonation of Delay in Filing Central Excise Appeal:
The Commissioner of Central Excise filed a Notice of Motion for condonation of a delay of 825 days in filing the Central Excise Appeal under Section 35G of the Central Excise Act, 1944. The appellant contended that the delay was due to pursuing rectification of mistake and a subsequent Writ Petition. However, the Court found the explanation for the delay unsatisfactory, noting a lack of justification for the one-year period between the dismissal of the rectification application and the filing of the Writ Petition. The Court cited a Supreme Court case emphasizing that government bodies must provide reasonable and acceptable explanations for delays, cautioning against condoning delays without genuine efforts. Ultimately, the Court refused to condone the delay, highlighting the need for diligence and commitment in government duties.

Issue 2: Merits of the CESTAT Order:
The CESTAT upheld the order of the Commissioner of Central Excise, which dropped a show cause notice demanding Rs.6.83 crores from the respondent-assessee regarding the utilization of Additional Excise Duty (AED) credit. The CESTAT found that the AED credit was legitimately earned and utilized for duty payment following relevant amendments. The Court upheld the CESTAT's decision, emphasizing that the debits were not considered duty payments and the credit needed to be restored to the assessee. The appellant relied on a CESTAT decision, which was distinguished by the CESTAT in the impugned order as inapplicable to the case at hand. Consequently, the Court rejected the appeal filed by the Revenue, sustaining the CESTAT's order regarding the restoration of AED credits taken prior to a specified date.

In conclusion, the Court dismissed the Notice of Motion for condonation of delay, highlighting the importance of providing genuine justifications for delays and upholding decisions based on merit and legal interpretations.