2015 (9) TMI 1081 - HC - Central Excise

Application for rectification - Computation of period of limitation - Whether period of six months under Section 35C(2) of Central Excise Act, 1944, commence from date of knowledge of order by assessee, whereas assessee proposed to avail remedy therein or not - Held that - Where an order is delivered and signed, and if same authority has to exercise power of rectification, modification, correction etc. suo-moto, limitation would commence from the date of signing and delivery of the said order and not when it is communicated to other side. Reason is that, knowledge of order by authority concerned can easily be attibuted on the date when order is signed and delivered by it. But the same thing would not apply when a similar exercise i.e. review, modification, rectification etc. has to be availed by other side i.e. party concerned. That party can only avail such remedy when it is made aware of the order. Therefore, for the purpose of computation of commencement of period of limitation, when the remedy has to be availed by a party, it is the date on which order is communicated to it and not the date on which order is signed or delivered, unless, it can be shown that date on which order was signed and delivered, party concerned was present in the court and had due knowledge thereof, and therefore, limitation should commence therefrom. Even in that case, it becomes the date of communication of order and not the date of mere passing of order. - Order of Tribunal is accordingly set aside. - Decided in favour of assessee.

Summary

Issues:
Interpretation of the period of limitation under Section 35C(2) of the Central Excise Act, 1944 based on the date of knowledge of the order by the assessee.

Analysis:
The primary issue in this case revolved around the interpretation of the period of limitation under Section 35C(2) of the Central Excise Act, 1944, specifically concerning the date from which the six-month period should commence. The Tribunal had rejected a rectification application on the grounds that the limitation period should be counted from the date of the order, not from the date it was served upon the assessee. However, the High Court referred to a decision by the Apex Court in Collector of Central Excise Vs. M.M. Rubber Co., which emphasized that the limitation period should commence from the date the order was communicated to the party affected, not the date of pronouncement or publication. This principle ensures that the affected party has a reasonable opportunity to know of the order's contents and avail further remedies. The High Court reiterated that the date of communication of the order to the affected party is crucial in determining the limitation period for seeking remedies.

Furthermore, the High Court clarified that when the same authority has to exercise powers like rectification, modification, or correction suo-moto, the limitation period commences from the date of signing and delivery of the order. However, when a party needs to avail such remedies, the limitation period starts from the date the order is communicated to that party. The Court highlighted the distinction between the authority's knowledge of the order and the party's awareness, emphasizing that the latter must be made aware of the order to avail of any remedies. The Tribunal's error lay in not considering this crucial distinction, leading to the High Court setting aside the Tribunal's order and remanding the matter for fresh consideration in light of the clarified principles.

In conclusion, the High Court answered the question in favor of the appellant, setting aside the Tribunal's order and allowing the appeal with costs. The matter was remanded to the Tribunal for a fresh decision based on the observations and principles outlined in the judgment.