2018 (4) TMI 225 - HC - Central Excise

Restoration of appeal - delay in filing of appeal of more than 22 years - power of Tribunal to condone the same - failure to make pre-deposit - Whether, the impugned order is passed in violation of the statutory right of the Appellant to contest the appeal as provided under Central Excise Act 1944? - Held that - There is no doubt, as is evident from the record that the delay in filing the application for restoration of appeal is about 22 years. The appellant has filed the restoration application as per convenience and after two decades. They were granted sufficient time by the Tribunal in the light of the order of the Supreme Court for extension of time for making the pre-deposit, but they failed to deposit even after a lapse of three years from the date of passing the pre-deposit order dated 19.1.1993. SCN for clandestine manufacture/sale etc. was issued on 25th March, 1988. The Order in Original was passed on 10th July, 1992. Recoveries obviously had to be made, especially once the Order in Original had become final. Mere recoveries or even payment after years cannot result in restoration of the appeals or justify condonation of delay in moving the restoration application. The appellant has been grossly negligent and derelict. Their inaction reflects acceptance and abandonment. The appellants have failed to show good cause and justification - there is no flaw or infirmity in the order of the Tribunal, rejecting the application for condonation of delay in filing the restoration application and accordingly dismissing the application for restoration. ROM application dismissed.

Summary

Issues Involved:
1. Violation of statutory right to contest the appeal.
2. Undue hardship caused by dismissal of the restoration application.
3. Procedural delay affecting the substantive right of appeal.
4. Delay in filing the application for restoration.
5. Prima facie case of the appellant.

Issue-wise Detailed Analysis:

1. Violation of Statutory Right to Contest the Appeal:
The appellant argued that the Tribunal's order violated their statutory right to contest the appeal under the Central Excise Act, 1944. The Tribunal had dismissed the restoration application due to a 22-year delay, which it deemed extraordinary and beyond its power to condone. The appellant contended that the Tribunal failed to consider precedents where courts adopted a liberal approach in condoning delays, especially when the appellant had already deposited more than the required pre-deposit amount.

2. Undue Hardship Caused by Dismissal of the Restoration Application:
The appellant claimed that the dismissal of the restoration application caused undue hardship despite compliance with the pre-deposit condition. The appellant had deposited ?21.26 crores, exceeding the ?18.83 crores directed by the Tribunal. The appellant argued that the Tribunal should have considered their financial difficulties and the fact that they were declared a sick unit by the Board for Industrial and Financial Reconstruction (BIFR), which had approved a rehabilitation scheme allowing installment payments.

3. Procedural Delay Affecting the Substantive Right of Appeal:
The appellant argued that the delay in meeting the pre-deposit requirement, which is procedural, should not extinguish their substantive right of appeal. They cited multiple precedents where courts restored appeals despite delays in pre-deposit, emphasizing a justice-oriented approach. The appellant's financial constraints and the BIFR's involvement were highlighted as reasons for the delay.

4. Delay in Filing the Application for Restoration:
The Tribunal noted that the delay in filing the restoration application was about 22 years, which it found extraordinary and beyond its power to condone. The appellant argued that there was no delay as they were under the shelter of BIFR until May 2016, and any delay was only 14 months. They claimed that the delay was due to a bona fide mistake and should be condoned. The Tribunal, however, found the appellant's explanation lacking in bona fides and reflecting gross negligence.

5. Prima Facie Case of the Appellant:
The appellant argued that they had a good prima facie case and that the joint liability demand and penalty were imposed without cogent evidence and in violation of natural justice principles. The Tribunal, however, dismissed the appeal for failure to make the pre-deposits, noting that the appellant had sufficient time and opportunity but failed to comply. The Tribunal found the appellant's conduct to be grossly negligent and derelict, reflecting acceptance and abandonment of their appeals.

Conclusion:
The Tribunal's order dismissing the restoration application was upheld. The appellant's arguments were found to lack bona fides and reflect gross negligence. The delay of 22 years was deemed extraordinary and unjustifiable, and the appellant's conduct was seen as an acceptance and abandonment of their appeals. The Tribunal's decision to reject the application for condonation of delay and dismiss the restoration application was affirmed, with no grounds found to interfere with the impugned order.