2018 (8) TMI 1218 - HC - Central Excise

Condonation of delay in filing appeal - Penalty - petitioner is carrying out a small scale industry - Recovery of outstanding balance defaulted duty of Excise - Section 11A(4) of the Central Excise Act - Held that - The Appellate Authority ought to have entertained the appeal on merits instead of dismissing the appeal in view of the provisions of Section 35 of the Central Excise Act, 1944. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. The impugned order passed by the Appellate Authority cannot be sustained. In order to do justice between the parties, the delay has to be condoned exercising the powers of this Court under Articles 226 and 227 of the Constitution of India and the mater requires reconsideration by the Appellate Authority - petition allowed by way of remand.

Summary

Issues:
1. Delay in filing the appeal before the Appellate Authority.
2. Applicability of Section 35(1) of the Central Excise Act, 1944.
3. Power of the Appellate Authority to condone delay beyond 90 days.
4. Justification for condoning delay in filing the appeal.
5. Rights of the parties involved in the appeal.
6. Application of Article 226 and 227 of the Constitution of India in condoning the delay.

Analysis:

The petitioner filed a Writ Petition seeking to quash an order passed by the Commissioner of Central Excise imposing a penalty for violating Central Excise Rules. The petitioner contended that the penalty was erroneously imposed, as the entire defaulted amount had been paid before the show cause notice was issued. The Appellate Authority dismissed the appeal due to a delay of 156 days in filing it. The petitioner argued that the delay should have been condoned under Section 29(2) of the Limitation Act. The respondent, however, argued that the Appellate Authority had no power to condone a delay beyond 90 days as per Section 35(1) of the Central Excise Act.

The Court considered the arguments and examined the material on record. It noted that the petitioner had explained the delay citing health issues. The Appellate Authority had directed the petitioner to pay 25% of the duty demanded, which the petitioner contested. The Court emphasized that substantial justice should prevail over technical considerations. Refusing to condone the delay could result in a meritorious matter being dismissed unfairly. Citing a Supreme Court judgment, the Court highlighted the importance of removing injustice.

Consequently, the Court held that the impugned order by the Appellate Authority could not be sustained. It exercised its powers under Articles 226 and 227 of the Constitution of India to condone the delay and remanded the matter to the Commissioner of Central Excise for fresh consideration on merits in accordance with the law. The writ petition was allowed, quashing the original order and requiring a reevaluation of the case.

This detailed analysis covers the issues of delay in filing the appeal, the authority's power to condone delay, the rights of the parties, and the application of constitutional provisions in ensuring justice in the legal judgment.