2014 (5) TMI 718 - HC - Central Excise

Condonation of delay - Bar of limitation - Whether in the facts and circumstances of the case, the Tribunal committed a substantial error in allowing the appeal of the Department ex parte holding that assessee s appeal before the Commissioner (Appeals) under Section 35 of the Central Excise Act, 1944, was time-barred - Held that - appellant herein before the authorities that though the order of Assistant Commissioner was dated 20-3-2006, it was received in his office on 6-4-2006 by the clerk of the firm received it, who did not inform the proprietor-assessee about it, the moot question before the Tribunal was that what could be said to be the date of communication of the order. The issue of limitation was dependent thereon. Not only that the Tribunal decided the issue of limitation without hearing the assessee. While it was open to the Tribunal to arrive at its own findings it ought to have done the same only after giving opportunity of being heard to the assessee and not ex parte. Observance of natural justice and affording hearing to the respondent was sine qua non for the Tribunal in its adjudicatory process - The starting point of limitation under Section 35 was the date of communication of the order which was required to be decided with reference to the facts pleaded by the assessee. In other words the question of limitation was inextricably linked with the factual plea. Therefore also, it was not only necessary but was indispensable for the Tribunal to decide the same only after bi parte hearing and after giving the opportunity to the other side - Matter remitted back - Decided in favour of assessee.

Summary

Issues:
- Interpretation of Section 35 of the Central Excise Act, 1944 regarding the time limit for filing an appeal.
- Whether the Tribunal erred in allowing the Department's appeal ex parte on the grounds of time-barred filing by the assessee.

Analysis:
1. Interpretation of Section 35 of the Act:
The case involved a dispute regarding the interpretation of Section 35 of the Central Excise Act, 1944, which governs the time limit for filing an appeal before the Commissioner (Appeals). The section allows an aggrieved person to file an appeal within 60 days from the date of communication of the order, with a provision for a further 30-day extension if sufficient cause is shown. The Tribunal's decision hinged on the date of communication of the order and the permissible time for filing the appeal.

2. Question of Time-Barred Appeal:
The crux of the matter was whether the Tribunal erred in allowing the Department's appeal ex parte on the grounds of the assessee's appeal being time-barred. The appellant-assessee contended that the order confirming the demand of duty was received by their clerk on 6-4-2006, and due to a delay in informing the proprietor, the appeal was filed on 3-10-2006. The Commissioner (Appeals) accepted this explanation, but the Tribunal disagreed, holding the appeal as time-barred.

3. Judicial Review and Observance of Natural Justice:
The High Court emphasized the importance of natural justice and the right to be heard in judicial proceedings. It noted that the Tribunal's decision on the issue of limitation was a mixed question of law and facts, requiring a thorough examination of the facts pleaded by the assessee. The Court criticized the Tribunal for deciding the matter ex parte without affording the assessee an opportunity to present their case, highlighting the necessity of due process in adjudicatory proceedings.

4. Remand for Fresh Consideration:
In light of the procedural irregularities and the need for a comprehensive review, the High Court remanded the case back to the Tribunal for fresh consideration. It directed the Tribunal to reexamine the appeals, conduct a fresh hearing with notice to all parties, and pass a new order after bi parte hearing. The Court clarified that the remand was solely for reconsideration of the procedural aspects and did not delve into the merits of the case.

5. Conclusion and Decision:
The High Court answered the formulated question of law in the affirmative, indicating that the appeal was allowed based on the procedural deficiencies identified. The Court's decision to remand the case for a fresh hearing underscored the importance of procedural fairness and adherence to principles of natural justice in legal proceedings.