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2017 (11) TMI 531 - HC - Central ExciseCondonation of delay - power of the Appellate Tribunal to invoke Section 14 of the Limitation Act - Sub-Section (2) of Section 35C - Held that - the Apex Court in the case of Commissioner of Sales Tax, UP. Versus Madan Lal Das & Sons, Bareilly 1976 (9) TMI 135 - SUPREME COURT OF INDIA , where it was held that though Section 14 may not in terms apply to the quasi-judicial Tribunals, the principle of Section 14 based on advancing the cause of justice would certainly apply to exclude time taken by the applicant in prosecuting proceedings which are bona fide and with due diligence. The Apex Court in the case of M.P. Steel Corporation v. Commissioner of Central Excise 2015 (4) TMI 849 - SUPREME COURT held that though a statue imposes embargo on the power of the Tribunal to condone the delay by providing that delay only upto the period of 60 days can be condoned, the time spent by the applicant in prosecuting wrong proceedings which are bona fide with due diligence can be excluded while computing the period of limitation. The Appellate Tribunal ought to have considered the issue whether the petitioners can be given benefit of the principles analogous to Sub-Section (2) of Section 14. Therefore, in the facts of the case, the matter will have to be remitted to the Appellate Tribunal for reconsideration of the prayer made by the petitioners for exclusion of time under (2) of Section 14. However, the number of factual aspects will have to be gone into - petition allowed by way of remand.
Issues Involved:
1. Power of the Appellate Tribunal to condone delay under Sub-Section (2) of Section 35C of the Central Excise Act, 1944. 2. Applicability of Section 14 of the Limitation Act, 1963 to the proceedings before the Appellate Tribunal. Issue-wise Detailed Analysis: 1. Power of the Appellate Tribunal to Condon Delay under Sub-Section (2) of Section 35C of the Central Excise Act, 1944: The petitioners challenged the order dated 6th March 2009 by the Customs, Excise and Service Tax Appellate Tribunal (Appellate Tribunal), which held that there is no provision in Sub-Section (2) of Section 35C to condone the delay. The Tribunal stated that if the legislature intended to confer power on the Appellate Tribunal to condone the delay, it would have provided for such power when amending Sub-Section (2) of Section 35C by Act No.20 of 2002, which reduced the limitation period from four years to six months. 2. Applicability of Section 14 of the Limitation Act, 1963 to the Proceedings before the Appellate Tribunal: The petitioners argued that the Appellate Tribunal should invoke Section 14 of the Limitation Act, which allows for the exclusion of time spent in bona fide prosecution of a proceeding in a court without jurisdiction. They relied on the Supreme Court's decision in M.P. Steel Corporation Vs. Commissioner of Central Excise, which held that the principles governing Section 14 would apply even if Section 14 per se does not. The respondents countered by citing the Division Bench decisions in Flemingo (Duty Free Shop) P. Ltd. Vs. Commissioner of Customs (Appeals) and Principal Commissioner of Central Excise and Custom, Daman Vs. Omnitex Industries (I) Ltd., arguing that Sections 5 or 14 of the Limitation Act are not applicable to the Appellate Tribunal. Court's Analysis: The Court noted that the decision in Flemingo Pvt. Ltd. was rendered before the Supreme Court's decision in M.P. Steel Corporation. The Supreme Court in M.P. Steel Corporation distinguished between the power to condone delay and the principles of Section 14, which provide for exclusion of time. The Supreme Court held that the principles of Section 14, based on advancing the cause of justice, would apply to exclude time taken in bona fide prosecution of proceedings. The Court observed that the Division Bench in Omnitex Industries followed the Supreme Court's decision in M.P. Steel Corporation, granting the benefit of Section 14 to the appellant. Conclusion: The Court concluded that the Appellate Tribunal should have considered whether the petitioners could be given the benefit of the principles analogous to Sub-Section (2) of Section 14. The matter was remitted to the Appellate Tribunal for reconsideration of the petitioners' prayer for exclusion of time under Section 14(2). Order: 1. The impugned order dated 6th March 2009 is quashed and set aside. 2. The applications are restored to the file of the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai. 3. The parties are directed to appear before the Tribunal on 13th November 2017 for fixing the schedule of hearing. 4. The Tribunal will decide whether the petitioners have made out a case for invoking principles governing Section 14(2) of the Limitation Act. 5. Rule is made partly absolute on the above terms.
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