2015 (5) TMI 26 - HC - Central Excise

Condonation of delay - Held that - There is no allegation of mala fide against the petitioner. It has not been recorded that the delay has been caused deliberately as a part of dilatory tactics on behalf of the assessee. - It has been held by the Apex Court in the case of N. Balakrishnan (1998 (9) TMI 602 - SUPREME COURT OF INDIA) that rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. - petitioner may be put to terms for the delay in filing of the appeal and thereafter, the Tribunal be asked to decide the appeal on merits. - Appeal restored conditionally.

Summary

Issues:
1. Condonation of delay application dismissal by Appellate Tribunal.
2. Interpretation of rules of limitation and consideration of delay causes.
3. Assessment order confirmation and penalty imposition.
4. Disputed explanation for delay in filing appeal.
5. Requirement of depositing penalty and security for balance amount.

Condonation of Delay Application Dismissal:
The Appellate Tribunal dismissed the Condonation of Delay application filed by the appellant, leading to the appeal. The Tribunal found the explanation for the delay unsatisfactory, resulting in the appeal being considered barred by limitation. The appellant argued that the delay was due to the lapse of memory of an active partner, which was not contradicted. Citing legal precedent, the appellant contended that the delay was not deliberate or dilatory, emphasizing the need for a liberal view in such cases.

Interpretation of Rules of Limitation:
The High Court emphasized that rules of limitation are not intended to deprive parties of their rights but to prevent dilatory tactics. Relying on legal principles, the Court noted that the cause of delay must be examined, and the absence of mala fide intentions must be considered. The Court directed the Tribunal to decide the appeal on its merits after imposing certain conditions on the appellant to address the delay issue.

Assessment Order Confirmation and Penalty Imposition:
The Joint Commissioner confirmed a service tax demand along with interest against the assessee, imposing penalties under relevant sections of the Finance Act, 1994. The appellant had already deposited the service tax and was willing to comply with the penalty requirements. The High Court modified the Tribunal's order, requiring the appellant to deposit 25% of the penalty in cash and provide security for the remaining amount to proceed with the appeal on merits.

Disputed Explanation for Delay in Filing Appeal:
The appellant's explanation for the delay in filing the appeal was contested by the department as flimsy. The Tribunal's decision to reject the explanation was upheld by the department, leading to the legal dispute. However, the High Court found no evidence of mala fide intentions on the part of the appellant and emphasized the need to consider the cause of delay rather than its length.

Requirement of Depositing Penalty and Security for Balance Amount:
The High Court directed the appellant to fulfill specific conditions, including depositing 25% of the penalty in cash and providing security for the remaining amount to the satisfaction of the Assessing Officer. Compliance with these conditions would result in the appeal being restored to its original status for a hearing on merits, with the delay in filing the appeal being condoned upon meeting the specified requirements.