2016 (4) TMI 978 - HC - Central Excise

Condonation of delay of more than 2200 days - Held that - there is hardly any reason for the long delay. Therefore, the Tribunal was justified in refusing to condone the delay. No substantial question of law arises for our consideration in the above appeals. Hence, in a matter that arose out of the show cause notices issued in 1999, do not propose to entertain these appeals. - Decided against the revenue

Summary

Issues:
Delay in filing appeals before the Tribunal under Section 35G of the Central Excise Act, 1944. Concern regarding condonation of delay of more than 2200 days. Failure to include proprietors, partners, brokers, and persons issuing bills in the initial appeals. Justification for condonation of delay. Impact of not filing appeals against individuals on the main appeals against manufacturers. Liability of partnership firm and proprietary concern. Enforceability of orders against proprietors/partners. Refusal to condone the delay by the Tribunal. Lack of substantial question of law for consideration.

Analysis:

The judgment delivered by the High Court of Madras pertains to appeals filed by the Commissioner of Central Excise under Section 35G of the Central Excise Act, 1944, challenging the delay in filing the appeals before the Tribunal. The appeals arose from a common order passed by the Customs, Excise and Service Tax Appellate Tribunal, which refused to condone the delay of more than 2200 days in filing the appeals.

The cases involved three sets of entities: M/s. Indian Steel and Allied Products, M/s. Goyal Ispat Udyog, and M/s. Indira Ispat Udyog. Show cause notices were issued in all three sets of cases in 1999, resulting in Orders in Original being passed in 2004. The Department filed main appeals in 2005 against these entities. However, during the appeals' arguments in 2012, it was realized that proprietors, partners, brokers, and persons issuing bills were omitted from the appeals, leading to a significant delay of 2249 days in filing fresh appeals against them.

The Department sought condonation of delay based on the advice of the Special Counsel, claiming inadvertent omissions in filing appeals against all relevant parties. The Tribunal, noting the lack of justification for the delay, dismissed the applications for condonation of delay. The Department's concern was that the main appeals against the manufacturers might fail if individuals were not included in the appeals.

However, the High Court held that the concern of the Department was unjustified as fines were already imposed on the individuals based on the manufacturer's guilt. The liability of partnership firms lies with the partners, and the liability of proprietary concerns lies with the proprietors. Therefore, the failure to file appeals against individuals would not affect the main appeals against the manufacturers.

The Court emphasized that if the Department succeeds in the main appeals against the manufacturers, the orders can be enforced against proprietors and partners. Given the lack of substantial questions of law and the absence of valid reasons for the delay, the Tribunal's decision to refuse condonation of delay was upheld, leading to the dismissal of the civil miscellaneous appeals and related CMPs.

In conclusion, the judgment clarifies the liability distribution in cases involving partnership firms and proprietary concerns, highlighting the enforceability of orders against proprietors and partners. The decision underscores the importance of timely and comprehensive filing of appeals while dismissing the appeals due to the lack of substantial legal questions and inadequate justification for the delay.