2013 (10) TMI 1049 - HC - Central Excise

Condonation of Delay Delay of 11 years and 227 days Held that - The Central Excise Department has been grossly negligent in pursuing the matter - The order of CEGAT allowing the appeal of the assessee and dismissing the appeal of the department was passed on 28.5.1999, against which a Special Leave to Appeal was filed before the Supreme Court, which was dismissed as withdrawn to file writ petition in the High Court - The department was well aware that the writ petition was not maintainable against the order and that a reference could be made for which an application had to be filed before the Tribunal - Instead of filing an application for reference, the department filed a writ petition in the High Court, which was admitted on 2.1.2002 - The writ petition was dismissed for want of prosecution on 11.10.2006 - A restoration application was filed with delay of 3 years in July, 2009 - When the matter came up for hearing, the Court found that the writ petition of the Central Excise Department against the order of the CEGAT was not maintainable - The Court dismissed the writ petition on 3.5.2010 on the ground of alternative remedy to file reference under the Central Excise Act - The department instead of approaching the Tribunal for making reference under Section 35 G (1) filed a reference directly in the High Court with delay - In the process more than 11 years time was consumed in challenging the order of CEGAT. The Central Excise Department has been grossly negligent in pursuing the matter - It filed appeal in the Supreme Court, which was not maintainable and thereafter a misconceived writ petition, which was dismissed on the ground of alternative remedy - In the process the department has consumed 11 years and 227 days within which the assessee must have arranged his financial affairs, which need not be disturbed at such distance of time - the delay condonation application rejected Decided against Petitioner.

Issues Involved:
1. Application for condonation of delay.
2. Maintainability of the reference application under Section 35H of the Central Excise Act, 1944.
3. Negligence and procedural lapses by the Central Excise Department.
4. Alternative remedy under Section 35G of the Central Excise Act.

Issue-wise Detailed Analysis:

1. Application for Condonation of Delay:
The Central Excise Reference application was filed on 11.5.2011, delayed by 11 years and 227 days from the order of the CEGAT. The initial application for condonation of delay was found deficient in explaining the long delay, prompting the court to allow time for filing a supplementary affidavit. Despite the supplementary affidavit, the delay was not sufficiently explained. The court noted that the Central Excise Department had been grossly negligent, consuming over 11 years in challenging the CEGAT's order without proper justification for the delay.

2. Maintainability of the Reference Application under Section 35H of the Central Excise Act, 1944:
The court examined the procedural requirements under Section 35H and found that the Central Excise Department failed to adhere to the prescribed procedure. The department did not file an application for reference before the Tribunal, as required under Section 35G (1) and (2). Instead, they directly approached the High Court, which was procedurally incorrect. The court emphasized that without exhausting the remedies under Section 35G, the reference application was not maintainable.

3. Negligence and Procedural Lapses by the Central Excise Department:
The court highlighted multiple instances of negligence by the Central Excise Department. Initially, the department filed a Special Leave Petition in the Supreme Court, which was dismissed as withdrawn. Subsequently, a writ petition was filed in the High Court, which was dismissed for want of prosecution and later restored after a delay of 3 1/2 years. When the writ petition was dismissed again on the ground of alternative remedy, the department still failed to follow the correct procedure for filing a reference. The court noted that the department's actions consumed significant time, reflecting gross negligence.

4. Alternative Remedy under Section 35G of the Central Excise Act:
The court reiterated that the appropriate remedy against the CEGAT's order was to file a reference under Section 35G of the Central Excise Act. The writ petition filed by the department was dismissed on this ground, as the alternative remedy was available but not pursued. The court found that the department's approach to filing a writ petition and subsequent reference application without following the proper procedure under Section 35G was misconceived and procedurally flawed.

Conclusion:
The court concluded that the Central Excise Department had been grossly negligent in pursuing the matter, failing to adhere to the procedural requirements and consuming over 11 years without sufficient explanation for the delay. Consequently, the application for condonation of delay was rejected, and the Central Excise Reference application was dismissed.

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