2023 (9) TMI 1190 - HC - Central Excise

Condonation of delay in filing revision application - Exclusion time spend for pursuing the appeal before CESTAT (wrong forum) - Time limitation - time barred order as filed beyond period prescribed under the statute - convincing reason or not - HELD THAT - Undisputedly, a revision application against an order passed under the provisions of the Act, 1944, by the appellate authority can be filed within 3 months from the date of communication of the order to the applicant and as per proviso to Section 35EE (2), if the Central Government is satisfied that the applicant was prevented by any sufficient cause for presenting the revision application within the period of 3 months, it may allow the same to be presented within a further period of 3 months. Meaning thereby that as per provision of Section 35EE, a revision application could not be entertained beyond the maximum period of 6 months from the date of communication to the applicant of the order challenged. However, it may be mentioned that the well settled proposition of law that even if a statute imposes embargo upon power of an authority to condone the delay by providing a specific period up to which such delay can be condoned, nonetheless, the time spent by the applicant in prosecuting wrong proceedings which are bonafide with due diligence can be excluded while computing the period of limitation, cannot be ignored. The High Court of Bombay while discussing MP. STEEL CORPORATION VERSUS COMMISSIONER OF CENTRAL EXCISE 2015 (4) TMI 849 - SUPREME COURT had observed that the principles of Section 14 of the Limitation Act, which were based on advancing the cause of justice would apply to exclude time taken in prosecuting proceedings which were bonafide and with due diligence pursued, which ultimately ended without a decision on the merits of the case. It is not in dispute that against the order dated 14.02.2003, the petitioner had filed appeal before the Tribunal within time. This appeal remained pending till 08.03.2004 and it was only then on that day that it was held to be not maintainable. No decision had been taken on merits by the Tribunal. The Tribunal had specifically observed that the period which was spent by the petitioner in pursuing the appeal may not be counted for the purpose of delay in filing the revision petition. Along with the revision application, the petitioner had filed an application for condoning the delay in filing the said application before respondent No. 1. The respondent No. 1 however, dismissed the revision application without passing any order on application for condonation of delay and by holding that the revision was time barred and that no convincing reason had been given by the petitioner for pursuing the matter before the Tribunal. The respondent No. 1 revisional authority completely ignored the time spent by the petitioner before the Tribunal. The entire issue from the angle that the petitioner had not only bonafidely file its appeal before the forum which lacked jurisdiction but pursued the same under a bonafide belief, the order dated 23.09.2004 as passed by respondent No. 1 is quashed being not sustainable and the file of the revision application restored to respondent No. 1-Joint Secretary (Revision) Government of India, (revisional authority), New Delhi for deciding the application for condonation of delay as well as the revision in accordance with law. Petition allowed.

Summary

Issues Involved:
1. Validity of the order dated 23.09.2004 dismissing the revision application as time-barred.
2. Applicability of Section 14 of the Limitation Act to exclude the time spent in prosecuting proceedings before a wrong forum.

Summary:

1. Validity of the order dated 23.09.2004 dismissing the revision application as time-barred:

The petitioner challenged the order dated 23.09.2004, passed by the Joint Secretary to the Government of India, Department of Revenue, which dismissed the revision application under Section 35EE of the Central Excise Act, 1944, as time-barred. The petitioner argued that the delay was due to pursuing a remedy before a wrong forum under a bona fide belief. The respondents contended that the revision was rightly dismissed as it was barred by time and the writ petition was not maintainable. The Court found that respondent No. 1 had not considered the merits of the case and dismissed the revision solely on the grounds of being time-barred, ignoring the time spent by the petitioner before the Tribunal.

2. Applicability of Section 14 of the Limitation Act to exclude the time spent in prosecuting proceedings before a wrong forum:

The Court referred to several precedents, including M. P. Steel Corporation Vs. Commissioner of Central Excise, IVP Ltd., and Gilco Limited's case, which established that the principles of Section 14 of the Limitation Act apply to exclude the time taken in prosecuting proceedings bona fide and with due diligence before a wrong forum. The Court held that the petitioner had pursued the appeal before the Tribunal under a bona fide belief, and the time spent in such proceedings should be excluded while calculating the period of limitation.

Conclusion:

The Court quashed the order dated 23.09.2004, restored the revision application to respondent No. 1 for deciding the application for condonation of delay and the revision on merits, and directed the parties to appear before the revisional authority on 31.10.2023. The petition was allowed.