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TMI Blog2015 (7) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... nt made by the Finance Act, 2008, the Committee of Chief Commissioners was required to pass an order within three months from the date of communication of the decision or the order. This period of three months is identical to the period of three months stipulated in Section 35-B of the Act. As per the scheme of the Act, sub-section (4) of Section 35-B(5) of the Act authorises the appellate tribunal to admit an appeal or permit filing of memorandum of cross-objections after expiry of relevant period if the tribunal is satisfied there was sufficient cause for not presenting the appeal within that period. As stated earlier, the power under sub-section (4) of Section 35-B has been made applicable to appeals preferred following the administrative procedure prescribed under Section 35-E of the Act. The statutory position as it existed in 1984, as we find, has undergone a change by the amendment made under the Finance Act, 2008. Under the changed circumstances, it would not be appropriate to restrict and bar an application of the provisions of sub-section (4) of Section 35-E to the period after passing of an order under sub-sections (1) and (2) of Section 35-E of the Act - Full Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tribunal) under Section 35-E(4) for correct determination. The order passed by the Committee was received by the Commissioner on 31.10.2011. 3. In accordance with the order passed by the Committee of Chief Commissioners, the Commissioner filed an application on 16.11.2011 before the tribunal under Section 35-E(4) within one month from the date of communication of the order of review. Be it noted, along with an application filed under Section 35-E(4), an application for condonation of delay was filed for condoning 8 days delay that occurred in review of the order of the Commissioner by the Committee of Chief Commissioners, for the Commissioner's order had been received by the reviewing authority on 18.7.2011 and the review order which was required to be passed within three months from the date of communication was passed after eight days of expiry of the period. 4. It was contended by the revenue before the tribunal that there was genuine reason for eight days delay in issue of the review order under Section 35-E(1) by the Committee of Chief Commissioners and, in any case, when the appeal had been filed within a period of four months of the receipt of the order in ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s power, the same has been exercised within time-limit and an order passed beyond the period prescribed under section 35E(3) would be invalid and ineffective. When an order passed by the reviewing authority after expiry of the limitation period is invalid and ineffective and since such an order is a prerequisite for filing appeal before the Tribunal, there is no question of condonation of delay. Same view has been taken by the Hon'ble Himachal Pradesh High Court in the case of Bhillai Wires Ltd. (supra). The judgment of the Tribunal in case of Monnet Ispat Energy Ltd. (supra) is contrary to the law laid down by the Apex Court in its judgment in case M.M. Rubber Co. (supra) which has been followed by Hon'ble Himachal Pradesh High Court in case of Bhillai Wires Ltd. (supra). In addition to the aforesaid reasoning the tribunal ascribed another reason that it cannot condone delay in filing as appeal as it has a duty to see before accepting an application filed by the a Commissioner under Section 35E(4) as an appeal against the Commissioner's order is backed by valid order passed by the Chief Commissioner under Section 35E (1). The tribunal held so inasmuch as it has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5B read as follows:- (3) Every appeal under this section shall be filed within three months from the date on which the order sought to be appealed against is communicated to the Collector of Central Excise, or, as the case may be, the other party preferring the appeal. (4) On receipt of notice that an appeal has been preferred under this section, the party against whom the appeal has been preferred may, notwithstanding that he may not have appealed against such order or any part thereof, file, within forty-five days of the receipt of the notice, a memorandum of cross-objections verified in the prescribed manner against any part of the order appealed against and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3). (5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period. 11. Before the Finance Act 1984, Section 35E read as follows:- (1) The Board may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) at the place of words such collector the words Commissioner or any other Commissioner were added. 13. As per the amendment made vide Finance Act of 2002, changes were brought in sub-section (3) of Section 35E. The amended sub-section (3) reads as follows: (3) The Board or Commissioner of Central Excise, as the case may be, shall, where it is possible to do so, made order under sub-section (1) or sub-section (2) within a period of six months, but not beyond a period of one year, from the date of the decision or order of the adjudicating authority. 14. Thereafter vide Finance Act, 2005, amendments were brought in Section 35E. At the place of Board , Committee of Chief Commissioners of Central Excise was added. In sub-section (2), the words such authority were replaced with such authority or any Central Excise Officer subordinate to him . 15. Section 35E of Central Excise Act, 1944 (after amendment vide Finance Act, 2008) reads as follows:- (1) The Committee of Chief Commissioners of Central Excise may, of its own motion, call for and examine the record of any proceeding in which a Commissioner of Central Excise as an adjudicating authority has passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of sub-section (4) of section 35B shall, so far as may be, apply to such application. 16. By the said Act, amendments were made to sub-section (3) and sub-section (4) restricting the period for passing of order under sub-section (1) or sub-section (2) to three months from the date of communication of the decision or order of the adjudicating authority and the period for making application after passing of order under sub-section (1) or sub-section (2) was reduced to one month instead of three months . 17. Vide amendment of 2014, proviso to Clause (3) of Section 35E was added which reads as follows:- Provided that the Board may, on sufficient cause being shown, extend the said period by another thirty days. 18. It is apt to note here that the controversy in the instant case is governed by the 2008 amendments. We have referred to 2014 amendment, as by the said amendment it has been stipulated that the Board has power to extend the time for passing an order under sub-sections (1) and (2) by a period of 30 days. We shall overt to the impact of the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative or becomes an effective order or decision on and from the date when it is signed by him. The date of such order or decision is the date on which the order or decision was passed or made : that is to say when he ceases to have any authority to tear it off and draft a different order and when he ceases to have any locus paetentiae. Normally that happens when the order or decision is made public or notified in some form or when it can be said to have left his hand. The date of communication of the order to the party whose rights are affected is not the relevant date for purposes of determining whether the power has been exercised within the prescribed time. 13. So far as the party who is affected by the order or decision for seeking his remedies against the same, he should be made aware of passing of such order. Therefore courts have uniformly laid down as a rule of law that for seeking the remedy the limitation starts from the date on which the order was communicated to him or the date on which it was pronounced or published under such circumstances that the parties affected by it have a reasonable opportunity of knowing of passing of the order and what it contains. The kno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act for the following reason. There appears to be no provision in the Act requiring the endorsement, by a Collector, of all orders passed by him to the Board. If there is such a practice in fact or requirement in law, the period of one year from the date of the order is more than adequate to ensure action in appropriate cases particularly in comparison with the much shorter period an assessee has within which to exercise his right of appeal. If, on the other hand, there is no such requirement or practice and the period within which the Board can interfere is left to depend on the off-chance of the Board coming to know of the existence of a particular order at some point of time, however distant, only administrative chaos can result. We are, therefore, of the opinion that the period of one year fixed under sub-section (3) of Section 35-E of the Act should be given its literal meaning and so construed the impugned direction of the Board was beyond the period of limitation prescribed therein and therefore invalid and ineffective. 22. The said decision has to be understood in its proper context. The core issue that arose for consideration was to the relevant date for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d if the tribunal is satisfied there was sufficient cause for not presenting the appeal within that period. As stated earlier, the power under sub-section (4) of Section 35-B has been made applicable to appeals preferred following the administrative procedure prescribed under Section 35-E of the Act. The statutory position as it existed in 1984, as we find, has undergone a change by the amendment made under the Finance Act, 2008. Under the changed circumstances, it would not be appropriate to restrict and bar an application of the provisions of sub-section (4) of Section 35-E to the period after passing of an order under sub-sections (1) and (2) of Section 35-E of the Act. We are inclined to think so as the amendment made by the Finance Act, 2008, the legislature, in effect, has equated the period of limitation prescribed under sub-section (3) of Section 35-E with the period prescribed for the Committee of the Chief Commissions under Section 35-E of the Act. Earlier, that is, before the Finance Act, 2005, the legislature had prescribed and given a longer period of limitation to the Board or the Committee of the Chief Commissioners which could be two years or one year. The said exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the delay in preferring an appeal cannot be condoned even if sufficient cause is shown. If such an interpretation is placed after 2008 amendment, it would be counter productive and not in consonance with the legislative intent which is clear as Section 35-B(4) has been made applicable to appeals which are preferred after taking recourse to the mechanism provided under Section 35-E. 25. As stated earlier, we must advert to the proviso inserted to sub-section (3) to Section 35-E by the Finance Act, 2014. The said proviso has a different purport. It empowers the Board to extend the time of passing of an order under sub-sections (1) and (2) by a period of 30 days.Once an order has been passed by the Board in exercise of the said power under the proviso, there would be no need and necessity to file an application seeking condonation of delay for the periods specified, which cannot exceed 30 days. The insertion of the said proviso by Finance Act, 2014 does not negate and is not contrary to the legislative mandate by Section 35-E as it existed prior to or after insertion of the said proviso. 26. Learned counsel has commended us to the decision in Commissioner of Customs and Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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