M/S Kalp Corporation vs. Union Of INDIA

Held

The Court held that while the statutory period for filing an appeal under Section 35 of the Central Excise Act, 1944, cannot be extended beyond 30 days by the Commissioner (Appeals), and a writ petition under Article 226 generally does not lie solely for condoning delay, such a petition can be entertained in exceptional circumstances. These circumstances include cases where the authority has acted without jurisdiction, exercised power in excess of jurisdiction, or acted in flagrant disregard of law or principles of natural justice. The Court found that the petitioner had demonstrated gross injustice and that their reasons for not filing the appeal within the stipulated period were justified. Therefore, invoking powers under Article 226, the Court condoned the delay and quashed the impugned order of the Additional Commissioner dated 27.08.2019. The matter was remanded to the Commissioner (Appeals) to decide the proceedings on merits after giving the petitioner a full opportunity to be heard, without being influenced by the present order. The Court explicitly stated it had not entered into the merits of the matter.

Facts

The petitioner, M/s Kalp Corporation, engaged in manufacturing plastic goods, received duty-paid inputs from M/s Reliance Industries. The invoices for these inputs, totaling Rs. 11,06,477, listed the Nagalpur factory's address, where the administration office was located, although the goods were physically delivered to the Dediyasan factory. An audit objection led to a show cause notice, and an ex-parte adjudication order was passed by the Additional Commissioner. The petitioner's appeal to the Commissioner (Appeals) was dismissed as time-barred. The revenue challenged the Commissioner (Appeals)'s order before the CESTAT, which eventually remanded the matter. The petitioner then filed a writ petition before the High Court, challenging the ex-parte adjudication order and seeking condonation of delay in filing an appeal.

Key Issues

1. Whether the High Court, in a writ petition under Article 226 of the Constitution, can condone the delay in filing an appeal beyond the statutory period prescribed under Section 35 of the Central Excise Act, 1944, particularly when the Commissioner (Appeals) has no power to condone delays exceeding 30 days? 2. Whether the ex-parte adjudication order passed by the Additional Commissioner, which led to the petitioner's appeal being time-barred before the Commissioner (Appeals), was passed without jurisdiction or in violation of the principles of natural justice, thereby warranting interference under Article 226? Petitioner's Arguments: The petitioner argued that the Additional Commissioner acted without jurisdiction and in breach of the principles of natural justice by passing an ex-parte order. They relied on the High Court's decision in M/s. Panoli Intermediate (India) Private Limited (2015 (326) ELT 532 (Guj.)) to contend that a writ petition under Article 226 is maintainable to address gross injustice arising from such orders, even if the appeal is time-barred. Revenue's Arguments: The revenue's affidavit denied the petitioner's averments. The judgment does not explicitly record separate arguments from the revenue regarding the maintainability of the writ petition or the condonation of delay, beyond their general denial of the petitioner's claims.