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2018 (2) TMI 396 - HC - Central ExciseTime limitation for filing appeal - MODVAT/CENVAT credit - changes in CCR and there being no saving clause enabling the continuance of such proceedings - Held that - the appeal was rejected on 08.03.2001. The saving clause came into force two months after the appeal was rejected. The amendment was brought into Section 35C(2) in 2002 with effect from 11.05.2002, i.e., more than one year after the appeal was rejected. The appellant even then waited for another two years before an application was filed, which was produced at Annexure-C dated 19.01.2004. It is also pertinent that there were three appeals dismissed by the CESTAT as per Annexure-B, as seen from the cause titles of a number of appeals extracted in the order. The appellant diligently filed two appeals and left out the appeal in the present proceedings. The appellant is found to have not diligently prosecuted the appeal in the present proceedings - appeal dismissed - decided against appellant.
Issues:
1. Refusal to restore an appeal by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) regarding MODVAT credit. 2. Deletion of provisions for MODVAT credit and introduction of CENVAT Credit Rules without a saving clause. 3. Interpretation of the saving clause under Section 38A of the Central Excise Act, 1944. 4. Impact of the amendment reducing the limitation period under Section 35C(2) on the appellant's right to file an application. Issue 1: Refusal to restore appeal by CESTAT: The appellant challenged the order of CESTAT refusing to restore an appeal regarding MODVAT credit. The original appeal was filed by the appellant against the reversal of MODVAT credit granted to them. The CESTAT refused to restore the appeal, citing the absence of a saving clause enabling the continuation of proceedings under the earlier Rules after the introduction of CENVAT Credit Rules. The appellant failed to diligently prosecute the appeal, leading to the dismissal of the appeal by the High Court. Issue 2: Deletion of MODVAT provisions and introduction of CENVAT Rules: Following the deletion of MODVAT credit provisions and the introduction of CENVAT Credit Rules without a saving clause, the CESTAT rejected several appeals filed under the MODVAT Credit Rules. The absence of a saving clause led to the rejection of the appellant's appeals, as highlighted in the order produced. Issue 3: Interpretation of the saving clause under Section 38A: The Central Excise Act introduced a saving clause, Section 38A, in 2001, which provided for rectification of mistakes by the Appellate Tribunal within a specified limitation period. The appellant contended that they had an accrued right to file an application to restore the appeal within the limitation period provided under the original Section 35C(2), which was later amended to reduce the limitation period to six months. However, the Court held that no right accrued to the appellant under the original limitation period, and the amendment reducing the limitation period was applicable. Issue 4: Impact of limitation period amendment on appellant's right: The Court rejected the appellant's argument that the orders should be governed under the pre-amended provisions, emphasizing that when the limitation period is reduced, an application could be filed within a reasonable time from the date of such amendment. The appellant's delay in filing the application after the saving clause came into effect and the subsequent reduction of the limitation period led to the dismissal of the appeal by the Court. In conclusion, the High Court dismissed the Central Excise Appeal, finding no reason to interfere with the order of CESTAT.
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