2013 (11) TMI 954 - AT - Central Excise

Condonation of Delay Delay of More than 6 years Held that - In the case of co-noticees, in the case of other two manufacturers, the orders were to the effect that rest of the proceedings were dropped - It appears from the adjudication order that the copies of the order were not endorsed to the respondents against whom applications are now filed - This does not appear to be relevant because as per section 35E (4) applications were to be filed within three months from the date on which CBEC had passed the order under section 35E (1) - there is delay as mentioned in the application whether or not the order has been communicated to the respondents. After lapse of a long period of over six years, it would become difficult for the respondents who have not been issued with notices regarding further proceedings to have retained evidences that they might have wanted to rely for their defence - Such long period of lapse creates a vested right for the respondents not to be dragged into further proceedings - it will be against the principle laid down by the Hon Apex Court to condone such long delay against express provisions made in the statute Following CCE Vs. L.P. Shenoy 2003 (2) TMI 138 - CEGAT, BANGALORE - The case of appeals against parties not connected (other than through the SCN) is on a much weaker footing - the applications for condoning of delay rejected - Thus, the 26 applications which are now treated as appeals in view of the amendments made in section 35E of Central Excise Act, also get rejected Decided against the revenue.

Summary

Issues Involved:
1. Condonation of delay in filing appeals.
2. Legality and propriety of the Commissioner's order.
3. Impact of delay on the rights of respondents.
4. Applicability of the doctrine of admissibility of preponderance of probability.

Comprehensive, Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing Appeals:
The primary issue in this proceeding is the condonation of a delay of more than six years in filing 26 appeals by the Revenue. The Revenue argued that the delay was due to oversight and not intentional, categorizing the new appeals as supplementary appeals. However, the respondents opposed this, contending that these were not supplementary appeals but new appeals against parties who believed the proceedings had concluded.

2. Legality and Propriety of the Commissioner's Order:
The Commissioner had adjudicated on three Show Cause Notices (SCNs) involving clandestine manufacture and clearance of steel products by three assessees: ISAP, IIU, and GIU. The Commissioner confirmed partial demands and penalties against ISAP and IIU but dropped the rest of the proceedings. For GIU, the proceedings were entirely dropped. The Central Board of Excise and Customs (CBEC) reviewed these orders and directed the Commissioner to apply to the Tribunal for a correct determination of the points arising from the orders, questioning whether the Commissioner's decisions were legally correct and proper.

3. Impact of Delay on the Rights of Respondents:
The Tribunal noted that the applications were filed against new parties after a significant lapse of time, exceeding the statutory limit. It was emphasized that the respondents had a bona fide belief that the proceedings against them had concluded, and such a long delay without notice would make it difficult for them to retain evidence for their defense. The Tribunal referred to the principle that rights accrued to others due to delay should not be disturbed unless there is a reasonable explanation for the delay.

4. Applicability of the Doctrine of Admissibility of Preponderance of Probability:
The CBEC argued that the Commissioner should have confirmed the entire demand based on the doctrine of admissibility of preponderance of probability, citing various evidences such as weighment certificates, tabulations by brokers, and consumption of excess power. However, the Tribunal found that the applications were filed well beyond the permissible time limits, and the delay could not be condoned, thereby rejecting the applications.

Conclusion:
The Tribunal rejected the applications for condoning the delay, emphasizing that the significant lapse of time created a vested right for the respondents not to be dragged into further proceedings. The Tribunal upheld the principle that the condonation of delay should not take away the rights accrued to the respondents due to the Revenue's negligence and latches. Consequently, the 26 applications treated as appeals were also rejected. However, it was clarified that the liabilities of the main respondents, if any, would not be affected by this order.