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2014 DIGILAW 199 (GUJ)

Vikram Knittex Pvt. Ltd. v. Union of India

2014-02-06

AKIL KURESHI, SONIA GOKANI

body2014
JUDGMENT AKIL KURESHI, J. 1. Petitioners made following prayers: "17. In the above premises, the petitioner most respectfully prays as under: (a) That Your Lordships may be pleased to issue of writ of mandamus, a writ of certiorari or any other appropriate writ, direction or order, quashing and setting aside OIO No. SRT-V/ADJ-139-148/2011-R dated 28.6.2011 (Annexure-A) with a direction to respondent No. 3 herein to grant and pay rebate claims aggregating to Rs. 8,07,312/- to the petitioner company with interest as prescribed under section 11BB of the Central Excise Act, 1944. (b) That Your Lordships may be pleased to issue a Writ of Mandamus, a Writ of Certiorari or any other appropriate writ, direction or order quashing and setting aside OIA No. CCE-SRT-I/SSP-165-174/U/S/ 35A Order (Delay Condonation) dated 29.11.2012 (Annexure-D) with consequential reliefs and benefits and also directions for allowing the appeal of the petitioner company by considering merits of the petitioner’s case. (c) That Your Lordships may be pleased to issue a Writ of Mandamus or any other appropriate writ, direction or order directing the respondents, their servants and agents to sanction and pay in favour of the petitioner company rebate claims aggregating to Rs. 8,07,312/- with interest under Section 11BB of the Central Excise Act, 1944. (d) Pending hearing and final disposal of the present petition, Your Lordships may be pleased to direct the respondents herein to pay rebate of Rs. 8,07,312/- to the Petitioner Company on the terms and conditions that may be deemed fit by this Hon’ble Court. (e) An ex-parte ad-interim relief in terms of para 17(D) above may kindly be granted. (f) Any other further relief as may be deemed fit in the facts and circumstances of the case may also please be granted." 2. The petitioner is a company registered under the Companies Act and is a Government recognized export house. The petitioner is engaged in exporting textile products as a merchant exporter. It is the case of the petitioner that 10 consignments of processed fabrics were removed for export from the factory of one M/s. Gujarat Polyfilms by the petitioner as a merchant exporter for which the procedure as laid down in the rules was followed. M/s. Gujarat Polyfilms as manufacturer of the fabric had paid excise duty of Rs. It is the case of the petitioner that 10 consignments of processed fabrics were removed for export from the factory of one M/s. Gujarat Polyfilms by the petitioner as a merchant exporter for which the procedure as laid down in the rules was followed. M/s. Gujarat Polyfilms as manufacturer of the fabric had paid excise duty of Rs. 8.07 lacs (rounded off) on such fabrics and cenvat credit of duty paid on inputs like yarn was utilized for discharging its duty liability. The petitioner company as a merchant exporter lodged rebate claims upon receiving documents of proof of export. These debate claims were not decided by the Revenue authorities. Show cause notice was issued on 25.1.2011, why rebate claim should not be rejected and penalty should not be imposed on M/s. Gujarat Polyfilms. The Deputy Commissioner of Central Excise passed order dated 28.6.2011 rejecting the rebate claim of the petitioner on the ground that permission for sending yarns for weaving on job work basis was allowed to M/s. Gujarat Polyfilms and further permission for sending unprocessed fabrics for dyeing and printing was issued on 29.3.2007 whereas M/s. Gujarat Polyfilms had sent unprocessed fabrics to the job workers for dyeing and printing before that and therefore, cenvat credit taken on inputs used for such fabrics was not admissible. The Deputy Commissioner also imposed penalty of Rs. 5,000/- on M/s. Gujarat Polyfilms. 3. M/s. Gujarat Polyfilms filed appeal before the Commissioner (Appeals) on 18.7.2011 raising several grounds. No appeal was filed by the present petitioner. According to the petitioner, under wrong impression that the appeal on behalf of the petitioner company has also been filed by the legal consultant, no steps were taken independently for challenging the said order of the Deputy Commissioner. 4. On 25.9.2012, the appeal was taken up for hearing by the Commissioner (Appeals). According to the petitioner, at that stage it was realized that no appeal was filed on behalf of the petitioner though it was required. On 27.9.2012, therefore, the petitioner company filed an appeal with a request for condonation to delay. 5. On 29.11.2012, the Commissioner (Appeals) passed two separate orders. The appeal of M/s. Gujarat Polyfilms was allowed setting aside the order of penalty. Appeal of the petitioner was rejected as time-barred and the delay being such that the Commissioner had no power to condone. 5. On 29.11.2012, the Commissioner (Appeals) passed two separate orders. The appeal of M/s. Gujarat Polyfilms was allowed setting aside the order of penalty. Appeal of the petitioner was rejected as time-barred and the delay being such that the Commissioner had no power to condone. At that stage, the petitioner approached this Court by filing the present petition. 6. From the prayers, it can be seen that though the petitioner has challenged the appellate Commissioner’s order rejecting the appeal of the petitioner on the ground of delay, a separate prayer has also been made challenging the very order of adjudication passed by the Deputy Commissioner. Learned counsel for the petitioner vehemently contended that there was bonafide error on the part of the consultant in not filing two separate appeals though technically needed. All along, the intention of the petitioner was to question the order of the Deputy Commissioner rejecting the rebate claims. Mere lapse of presentation of appeal should not result into injustice because of operation of statute. He, therefore, submitted that this Court should examine the legality of the order in original itself exercising writ jurisdiction. In this context, he relied on certain orders passed by this Court to which we would refer to at a later stage. 7. On the other hand, learned counsel Shri Bhatt for the department opposed the petition contending that the appeal was hopelessly barred by limitation. The Commissioner rightly rejected the same since the statute did not permit condonation of delay beyond a period of 30 days after the limitation of 60 days prescribed. Even otherwise, the order in original is just and proper. 8. Undisputedly, the statute provides for limitation of 60 days in preferring appeal before the Commissioner under section 35 of the Central Excise Act, 1944. Proviso to section 35 provides that the Commissioner (Appeals) may if it is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the said period of 60 days, allow it to be presented within a further period of 30 days. Thus, the statute in addition to providing limitation of 60 days in preferring an appeal before the Commissioner, gives discretion to him to condone delay in preferring the appeal on sufficient ground upto a further period of 30 days. The statute thus does not permit condonation of delay beyond the said period. Thus, the statute in addition to providing limitation of 60 days in preferring an appeal before the Commissioner, gives discretion to him to condone delay in preferring the appeal on sufficient ground upto a further period of 30 days. The statute thus does not permit condonation of delay beyond the said period. Such statutory provisions have come up for consideration before various courts including the Supreme Court on various occasions. In the case of Commissioner of Customs & Central Excise vs. Hongo India Pvt. Ltd. 236 ELT 417 (SC), the Supreme Court held that High Court has no power to condone delay beyond the maximum extendable under the Excise Act and section 5 of the Limitation Act would not apply in such a situation. This view is subsequently followed by the Supreme Court on number of occasions. In that view of the matter, the Commissioner was perfectly justified in refusing to entertain the appeal of the petitioner which was filed number of months beyond the period of 60 days plus 30 days, which is the maximum extendable time limit. We may recall that the adjudicating authority passed the order in original on 28.6.2011 and the appeal of the petitioner came to be filed only on 27.9.2012. 9. It is true that under certain extraordinary circumstances, this Court has examined the validity of the order in original itself even though the appeal of the person aggrieved may have been otherwise barred by limitation. Such instances have to be rare and such powers are to be exercised in extraordinary circumstances in order to do justice in otherwise a harsh case. This Court relying on an earlier decision of the Division Bench of this Court in the case of D.R. Industries Ltd. vs. Union of India, (2008) 3 GLH 662 , exercised such extraordinary powers in rare cases. Even while doing so, the Court has consciously put on itself two important self-imposed restrictions, firstly that the delay should otherwise be well explained and secondly the Court should find non-consideration of issues would result into gross injustice. This can be seen from the judgment in the case of Lathia Industrial Supples Co. Pvt. Ltd. vs. Commissioner, dated 20.3.2013 in Special Civil Application No. 16182 of 2012, in which the Court observed as under: "5. This can be seen from the judgment in the case of Lathia Industrial Supples Co. Pvt. Ltd. vs. Commissioner, dated 20.3.2013 in Special Civil Application No. 16182 of 2012, in which the Court observed as under: "5. Having thus heard learned counsel for the parties, in facts off the case, we are inclined to put the matter back at the stage of adjudicating authority. We notice that there has been some delay in the petitioners’ approaching the Appellate Commissioner and obviously the Commissioner could not have ignored the statutory limit beyond which he could have condoned the delay. Nevertheless, as held by the Division Bench of this Court in case of D.R. Industries and Another vs. Union of India and Others, 2008 (3) GLH 662 , such a situation would not prevent the High Court in appropriate case examine the validity of the order in original itself. This is however, hedged by two requirements. On that delay is otherwise well explained and the Court finds that non consideration of the issues would result into gross injustice. The Court observed as under: "19. As regards the contention that there may be extraordinary cases where assessees may not be in a position to challenge the order of the adjudicating authority before the Commissioner (Appeals) within a period of 90 days from the date of communication of the order, we are of the view that in such extraordinary cases where an assessee can show extra ordinary circumstances explaining the delay and also gross injustice done by the adjudicating authority, the assessee may invoke the writ jurisdiction of this Court. Hence, in cases where the assessees have suffered gross injustice and they could not file appeals before the Commissioner (Appeals) within a period of 90 days from the date of communication of the order in original on account of circumstances beyond their control, such assessees can invoke the powers of this Court under Article 226 of the Constitution but, of course, not as a matter of right." 6. In the present case, we record that delay was sufficiently explained. We are also prima facie of the opinion that the Tribunal’s decision in case of M/s. Lathia Industries Suppliers (supra), does touch on the aspect of the matter. In the present case, we record that delay was sufficiently explained. We are also prima facie of the opinion that the Tribunal’s decision in case of M/s. Lathia Industries Suppliers (supra), does touch on the aspect of the matter. However, this shall have to be verified by the adjudicating authority with the assistance of the petitioner." This modality was applied in the case of Amitara Industries Ltd. vs. Union of India, in order dated 30th January 2013 in Special Civil Application No. 6069 of 2011 making following observations: "12. In the instant case, we have found that in the first round of litigation present petitioner was refunded the amount by way of order in original. The respondents have also not disputed the fact that the petitioner has extremely good case on merit. We also need to record the fact that the petitioner while challenging the order impugned before the Commissioner(Appeals) not only had preferred the application for condonation of delay, but, had also substantiated the same grounds with sufficient and acceptable grounds for condoning such delay and thus has explained sufficiently from the beginning such delay. It is a different aspect that appellate forums are bound by the law on the issue. Thus the total length of delay being very small and with extremely good ground on merit to sustain, we are of the opinion that non interference at this stage would cause gross injustice to the petitioner. Therefore, we need to step in by invoking extraordinary jurisdiction." 10. Coming to the facts of the present case, we cannot view the limitation imposed under the statute leniently so as to bring through the backdoor the concept of sufficient cause flowing from section 5 of the Limitation Act. Even otherwise, the delay remains largely unexplained. The statute provided for a limitation of 60 days with a maximum possible extension of further 30 days. The statutory scheme thus recognizes that the right to appeal beyond the said period would be lost without any possibility of extension. Had there been some extraordinary circumstances preventing the petitioner from presenting the appeal within such time coupled with the gross injustice on account of termination of appellate remedy, we would have still considered the case of the petitioner for invoking the extra ordinary writ jurisdiction. In the present case, however, we find that the explanation for delay itself is insufficient. Had there been some extraordinary circumstances preventing the petitioner from presenting the appeal within such time coupled with the gross injustice on account of termination of appellate remedy, we would have still considered the case of the petitioner for invoking the extra ordinary writ jurisdiction. In the present case, however, we find that the explanation for delay itself is insufficient. Learned counsel for the petitioner had made available certain documents such as, appeal memo of the petitioner as well as that of M/s. Gujarat Polyfilms which documents were not part of the writ petition. In the appeal filed by M/s. Gujarat Polyfilms, the statements of facts as well as stand of the appellant to the objections of the Department were from the stand point of the appellant, viz. M/s. Gujarat Polyfilms. The present petitioner, viz., M/s. Vikram Knittex Pvt. Ltd. was referred to as the party who had approached the said appellant for purchase of goods for exports. The said appeal therefore was only by M/s. Gujarat Polyfilms. No contrary intention could be seen from the entire statement of facts and the reply of the appellant. It is true that in the prayer in addition to the request for quashing the order of the Deputy Commissioner, it was also prayed that pending rebate claims of Rs. 8.07 lacs be sanctioned. This one line statement would not convert the appeal of M/s. Gujarat Polyfilms into one filed by the present petitioner. If this were so, there was no occasion for the petitioner to file a separate appeal and could easily have sought amendment of technical nature before the appellate Commissioner and pressed its own appeal. 11. In the appeal filed by the petitioner much belatedly, to explain the delay all that was stated was as under: "4. There is delay in filing the Appeal by oversight. When M/s. Gujarat Polyfilms Pvt. Ltd. filed an Appeal against this order, we thought that we also have filed the same with them." Before us in the present petition also, to explain the delay, it is stated that the petitioner was under a genuine and bonafide impression that appeal was filed on their behalf before the Commissioner since the petitioner company and the Gujarat Polyfilms had a common cause. Counsel for the petitioner additionally stated before us that the consultant was instructed to file appeals on behalf of both the entities and only due to oversight, he preferred one appeal. 12. In our opinion, such general statement would not explain such inordinate delay. Particularly when the statute puts a lid on the number of days of delay that the Commissioner can condone beyond which the appeal simply cannot be entertained, it would not be possible to ignore such a long delay on mere explanation that under a bonafide impression that the consultant would have filed appeal or that the appeal of Gujarat Polyfilms would cover the case of the petitioner as well. 13. On such ground, we are not inclined to grant the prayers of the petitioners. The petition is therefore dismissed. Rule is discharged.