2025 (3) TMI 963 - HC - Central Excise

Dismissal of appeal on the ground of being time barred - HELD THAT - A careful perusal of Section 35 (1) of the Central Excise Act would show that the Central Excise Officer is required to communicate the order to the person aggrieved for the purpose of providing a remedy to the person adversely affected by the order and thereby limitation would commence from the date of communication. However the word communication used in Section 35 (1) has not been defined in the Central Excise Act or the rules made thereunder therefore the same deserves to be interpreted by applying the rule of contextual interpretation and keeping in view the language of the relevant provisions. In the matter of Kubic Darusz v. Union of India and others 1990 (1) TMI 78 - SUPREME COURT their Lordships of the Supreme Court while dealing with communication of grounds of detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act 1974 (COFEPOSA Act) held that communicate is a strong word. It requires that sufficient knowledge of the basic facts constituting the grounds should be imparted effectively and fully to the detenu in writing in a language which he understands so as to enable him to make a purposeful and effective representation. A careful perusal of Section 37C (1) of the Central Excise Act would show that any decision or order passed or any summons or notice issued under this Act or the rules made thereunder shall be served also by speed post with proof of delivery to the person for whom it is intended or his authorised agent if any; if the decision order summons or notice cannot be served in the manner provided in clause (a) by affixing a copy thereof to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision order summons or notice as the case may be is intended; and if the decision order summons or notice cannot be served in the manner provided in clauses (a) and (b) by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice. Sub-section (2) of Section 37C provides that every decision or order passed or any summons or notice issued under this Act or the rules made thereunder shall be deemed to have been served on the date on which the decision order summons or notice is tendered or delivered by post. Section 37C of the Central Excise Act which provides the manner of serving the copy of decision or order it is quite vivid that the purpose of communicating the order to the person aggrieved in this case the appellant herein / assessee is for the purpose of enabling him to prefer an appeal against the adjudicating order before the Commissioner (Appeals) as only 60 days time has been provided from the date of communication to prefer appeal and the Commissioner (Appeals) is empowered only to condone the delay of further 30 days and thereby after 90 days from the date of communication no further jurisdiction has been conferred to the Commissioner (Appeals) to condone the delay. There is complete exclusion of Section 5 of the Limitation Act as held by the Supreme Court in Singh Enterprises 2007 (12) TMI 11 - SUPREME COURT . As per showing of the appellant once he is communicated with the copy of adjudication order by e-mail on 27-7-2018 he would be justified in preferring appeal on 25-9-2018 before the Commissioner (Appeals) which is within the period of limitation of 60 days from the date of communication of the order as the appellant was actually communicated with the order on 27-7-2018. As such the Commissioner (Appeals) has committed grave legal error in holding the appeal to be barred by limitation and that it has been filed beyond the period of 60 days from the date of communication of the order. The CESTAT has also committed legal error in perpetuating the illegality committed by the Commissioner (Appeals) by dismissing the appeal holding it to be barred by limitation by affirming the order passed by the Commissioner (Appeals). Conclusion - The limitation period for filing an appeal under Section 35(1) of the Central Excise Act begins from the actual or constructive communication of the order to the aggrieved party. The requirement for proof of delivery under Section 37C is essential for establishing the commencement of the limitation period. The substantial question of law is answered in favour of the assessee and against the Revenue. The matter is remitted to the Commissioner (Appeals) for adjudicating the appeal on its own merit in accordance with law expeditiously as the appeal is old one and required to be decided expeditiously.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal question considered in this judgment was whether the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) was justified in dismissing the appeal preferred by the appellant and affirming the order of the Commissioner of Central Excise (Appeals) on the grounds that the appeal was barred by limitation. The question also involved determining whether the finding of the Commissioner of Central Excise (Appeals) regarding the dismissal was perverse to the record.

2. ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents:

The legal framework primarily involved Section 35 and Section 37C of the Central Excise Act, 1944. Section 35(1) mandates that an appeal to the Commissioner (Appeals) must be filed within 60 days from the date of communication of the decision or order, with a possible extension of 30 days if sufficient cause is shown. Section 37C outlines the manner of service of decisions and orders, requiring proof of delivery when using speed post.

Precedents considered include the Supreme Court's decisions in Singh Enterprises v. Commissioner of Central Excise, Saral Wire Craft Private Limited v. Commissioner of Customs, and others, which emphasize the necessity of effective communication of orders to enable the exercise of legal remedies.

Court's interpretation and reasoning:

The Court interpreted the term "communication" as requiring effective and actual knowledge of the order by the aggrieved party, aligning with principles of fairness and practicality. The Court referred to the definition in Black's Law Dictionary and various Supreme Court judgments to underscore that communication should impart sufficient knowledge to enable the aggrieved party to take action.

Key evidence and findings:

The appellant claimed to have received the order via email on 27-7-2018, while the respondents asserted it was dispatched via speed post on 15-12-2017. The Court noted the absence of proof of delivery for the speed post consignment, which was crucial for establishing the date of communication. The document status from Indiapost.gov.in indicated "Consignment Details Not Found," supporting the appellant's claim of not receiving the order through the purported speed post.

Application of law to facts:

The Court applied the principles from Section 35(1) and Section 37C, emphasizing that the limitation period for filing an appeal should commence from the actual date of communication. Given the lack of proof of delivery, the Court accepted the appellant's claim of receiving the order via email on 27-7-2018, making the appeal filed on 25-9-2018 within the permissible period.

Treatment of competing arguments:

The appellant argued that the absence of proof of delivery invalidated the dismissal of the appeal as time-barred. The respondents contended that dispatch via speed post constituted valid service. The Court favored the appellant's argument, stressing the necessity for proof of delivery to establish communication.

Conclusions:

The Court concluded that the appeal was filed within the limitation period, as the effective communication of the order occurred via email on 27-7-2018. The Commissioner (Appeals) and CESTAT erred in dismissing the appeal based on an incorrect application of the limitation period.

3. SIGNIFICANT HOLDINGS

The Court held that:

"The substantial question of law is answered in favor of the assessee and against the Revenue."

The core principle established is that the limitation period for filing an appeal under Section 35(1) of the Central Excise Act begins from the actual or constructive communication of the order to the aggrieved party. The requirement for proof of delivery under Section 37C is essential for establishing the commencement of the limitation period.

Final determinations on each issue led to the setting aside of the orders passed by the Commissioner (Appeals) and affirmed by the CESTAT. The matter was remitted to the Commissioner (Appeals) for adjudication on its merits, emphasizing the need for expeditious resolution due to the appeal's age.