2015 (4) TMI 849 - SC - Customs

Condonation of delay - Power of Commissioner to condone delay beyond the period of 60 days plus 30days - Section 128 - Appeal was pursued before wrong forum - Held that - On a plain reading of the provisions of the Limitation Act, it becomes clear that suits, appeals and applications are only to be considered (from the limitation point of view) if they are filed in courts and not in quasi-judicial bodies. A number of decisions have established that the Limitation Act applies only to courts and not to Tribunals. The distinction between courts and quasi-judicial decisions is succinctly brought out in Bharat Bank Ltd. v. Employees of Bharat Bank Ltd., 1950 (5) TMI 19 - SUPREME COURT OF INDIA . This root authority has been followed in a catena of judgments. - one that authorities under the Sales Tax Act are not courts and thus, the Limitation Act will not apply to them. Judgment is in line with a large number of authorities which have held that Section 14 should be liberally construed to advance the cause of justice - see Shakti Tubes Ltd. v. State of Bihar, 2008 (12) TMI 721 - SUPREME COURT OF INDIA and the judgments cited therein. Obviously, the context of Section 14 would require that the term court be liberally construed to include within it quasi-judicial Tribunals as well. This is for the very good reason that the principle of Section 14 is that whenever a person bonafide prosecutes with due diligence another proceeding which proves to be abortive because it is without jurisdiction, or otherwise no decision could be rendered on merits, the time taken in such proceeding ought to be excluded as otherwise the person who has approached the Court in such proceeding would be penalized for no fault of his own. Limitation Act including Section 14 would not apply to appeals filed before a quasi-judicial Tribunal such as the Collector (Appeals) mentioned in Section 128 of the Customs Act. However, this does not conclude the issue. There is authority for the proposition that even where Section 14 may not apply, the principles on which Section 14 is based, being principles which advance the cause of justice, would nevertheless apply. We must never forget, as stated in Bhudan Singh & Anr. v. Nabi Bux & Anr., 1969 (8) TMI 83 - Supreme Court Of India , that justice and reason is at the heart of all legislation by Parliament. Merely because Parson Tools also dealt with a provision in a tax statute does not make the ratio of the said decision apply to a completely differently worded tax statute with a much shorter period of limitation - Section 128 of the Customs Act. Also, the principle of Section 14 would apply not merely in condoning delay within the outer period prescribed for condonation but would apply de hors such period for the reason pointed out in Consolidated Engineering 2008 (4) TMI 668 - SUPREME COURT , being the difference between exclusion of a certain period altogether under Section 14 principles and condoning delay. As has been pointed out in the said judgment, when a certain period is excluded by applying the principles contained in Section 14, there is no delay to be attributed to the appellant and the limitation period provided by the concerned statute continues to be the stated period and not more than the stated period. We conclude, therefore, that the principle of Section 14 which is a principle based on advancing the cause of justice would certainly apply to exclude time taken in prosecuting proceedings which are bona fide and with due diligence pursued, which ultimately end without a decision on the merits of the case. Take the case of a plaintiff or applicant who has succeeded at the first stage of what turns out to be an abortive proceeding. Assume that, on a given state of facts, a defendant - appellant or other appellant takes six months more than the prescribed period for filing an appeal. The delay in filing the appeal is condoned. The plaintiff/applicant files such a proceeding on the ninetieth day i.e. after three months are over. The said proceeding turns out to be abortive after it has gone through a chequered career in the appeal courts. The same plaintiff/applicant now files a fresh proceeding before a court of first instance having the necessary jurisdiction. So long as the said proceeding is filed within the remaining three month period, Section 14 will apply to exclude the entire time taken starting from the ninety first day till the final appeal is ultimately dismissed. The right of appeal within a period of 180 days (which includes the discretionary period of 90 days) from the date of the said order was a right which vested in the appellant. A shadow was cast by the abortive appeal from 1992 right upto 2003. This shadow was lifted when it became clear that the proceeding filed in1992 was a proceeding before the wrong forum. The vested right of appeal within the period of 180 days had not yet got over. Upon the lifting of the shadow, a certain residuary period within which a proper appeal could be filed still remained. That period would continue to be within the period of 180 days notwithstanding the amendment made in 2001 as otherwise the right to appeal itself would vanish given the shorter period of limitation provided by Section 128 after 2001. - Matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
1. Calculation of Light Displacement Tonnage (LDT) for customs duty.
2. Jurisdiction of CEGAT to entertain the appeal.
3. Application of Section 14 of the Limitation Act to appeals before quasi-judicial tribunals.
4. Retrospective application of amended limitation periods.

Detailed Analysis:

1. Calculation of Light Displacement Tonnage (LDT) for Customs Duty:
The appellant, engaged in ship breaking, imported a vessel and declared its LDT as 7009 metric tons in the Bill of Entry. The Superintendent of Customs and Central Excise later assessed the LDT as 8570 tons, resulting in a higher customs duty. The appellant paid duty based on the declared LDT and provided a bank guarantee for the difference. The Collector of Customs directed the encashment of the bank guarantee, which was contested by the appellant.

2. Jurisdiction of CEGAT to Entertain the Appeal:
The appellant filed an appeal before CEGAT against the Superintendent's order. CEGAT allowed the appeal, but the Department challenged this before the Supreme Court. The Supreme Court held that the appeal should have been filed before the Commissioner (Appeals) under Section 128, as CEGAT had no jurisdiction. The Court stated, "The decision taken by the Collector was not taken in his capacity as Collector (Appeals). Also, the order by which respondent is aggrieved is the order passed by the Superintendent."

3. Application of Section 14 of the Limitation Act to Appeals Before Quasi-Judicial Tribunals:
The appellant argued that the period spent in prosecuting the appeal before CEGAT should be excluded under Section 14 of the Limitation Act. The Court discussed the applicability of Section 14 to tribunals and held that, although Section 14 may not apply directly, its principles could still be invoked to exclude time spent in bona fide litigation. The Court stated, "Despite the fact that Section 14 of the Limitation Act may not apply, yet the principles of Section 14 will get attracted to the facts of the present case."

4. Retrospective Application of Amended Limitation Periods:
The appellant contended that the limitation period under the pre-amended Section 128 (180 days) should apply, as the order being appealed was passed before the amendment. The Court agreed, stating that the vested right to appeal within 180 days could not be curtailed by the subsequent amendment reducing the period to 90 days. The Court held, "The right of appeal within a period of 180 days (which includes the discretionary period of 90 days) from the date of the said order was a right which vested in the appellant."

Conclusion:
The Supreme Court set aside the order of CESTAT dismissing the appeal on grounds of delay and remanded the case for a decision on merits. The principles of Section 14 of the Limitation Act were applied to exclude the time spent in prosecuting the abortive appeal before CEGAT. The vested right to appeal within 180 days under the pre-amended Section 128 was upheld. The appeal was allowed without any order as to costs.