M/S Vishkarma Agriculture Industries vs. Union Of INDIA And Others

Held

The Court held that while the Commissioner (Appeals) has no power to condone delay beyond 30 days as per Section 35 of the Central Excise Act, 1944, the High Court, in its writ jurisdiction under Article 226, can condone such delay to prevent miscarriage of justice. The Court noted that the Petitioner made the pre-deposit within the normal limitation period and the delay of 47 days occurred due to the courier agency's failure to deliver the appeal. The Court found the delay to be minor and attributed no lapse to the Petitioner. Furthermore, the Court observed that the demand was prima facie not sustainable, referencing the pendency of classification issues before the Supreme Court and the CESTAT's decisions in similar cases. Therefore, the Court quashed the impugned Order-in-Appeal and restored the appeal to the file of the Commissioner (Appeals) for decision on merits. The Petitioner was directed to appear before the Commissioner (Appeals) on 07.08.2019.

Facts

The Petitioner, M/s Vishkarma Agriculture Industries, filed a writ petition challenging an Order-in-Appeal dated 03.01.2017 by the Commissioner (Appeals) which dismissed their appeal on grounds of delay. The Petitioner also sought to quash the Order-in-Original dated 21.03.2016, which confirmed a demand of Central Excise Duty amounting to Rs. 44,44,488/- for the period December 2009 to March 2014, and Rs. 20,30,571/- for April-July 2014, along with penalties. The Petitioner received the Order-in-Original on 26.03.2016. They sent their appeal via courier on 18.05.2016, after making the mandatory 7.5% pre-deposit. However, the courier failed to deliver the appeal and returned it to the Petitioner's counsel on 07.07.2016. The Petitioner then filed the appeal with a condonation of delay application on 11.07.2016. The Commissioner (Appeals) dismissed the appeal due to delay, holding that he had no power to condone delay beyond 30 days.

Key Issues

1. Whether the High Court, in its writ jurisdiction under Article 226 of the Constitution, can condone delay in filing an appeal beyond the period prescribed by Section 35 of the Central Excise Act, 1944, and the proviso thereto, especially when the statutory appellate authority lacks such power? 2. Whether the demand for Central Excise Duty raised by the respondents is sustainable, considering the Petitioner's contention regarding the correct classification of their product and the withdrawal of a previous CBEC circular? Petitioner's Arguments: - The issue of correct classification of the paddy parboiling plant is pending before the Supreme Court. - In a similar case involving the son of the Petitioner's proprietor, the Commissioner (Appeals) allowed the appeal on limitation. - CESTAT has dropped demands for periods prior to 15.05.2014 for identically situated parties, and most of the Petitioner's period falls before this date. - High Courts have the power under Article 226 to set aside orders of appellate authorities dismissing appeals on delay and remand the matter for decision on merits, or set aside the original order if the demand is not maintainable, citing judgments like JCB India Ltd. Vs. UOI. Respondents' Arguments: - The Petitioner was bound to file the appeal within 60 days, and the Commissioner (Appeals) rightly held that he had no power to condone delay beyond 30 days. - The department has filed a Civil Appeal before the Supreme Court against the judgment in JCB India Ltd. (supra).