Basant Kumar Singh vs. Principal Commissioner

Facts

The appellant, Basant Kumar Singh, filed an appeal before the High Court of Chhattisgarh with a delay of 24 days. The appeal challenged an order dated 16/02/2023 passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi. Prior to this, the appellant had filed an application for rectification under Section 35C(2) of the Central Excise Act, 1944, read with Rule 41 of the CESTAT (Procedure) Rules, 1982, which was dismissed on 31/07/2023. The CESTAT had previously dismissed the appellant's appeal on 16/02/2023, citing a delay of 52 days in its filing, without adjudicating on merits. The appellant argued that the delay was due to financial constraints and litigation costs, and that he was actively pursuing his statutory remedies.

Held

The High Court held that it had the power under Section 35G (2A) of the Central Excise Act, 1944, to condone the delay of 24 days in filing the present appeal. The Court reasoned that the appellant was not dormant, having actively pursued his statutory remedy of filing a rectification application. The Court found that this bona fide explanation for the delay was reasonable. Regarding the CESTAT's order, the Court observed that the appellant had shown sufficient cause for the 52-day delay in filing the appeal before the Tribunal, citing financial litigation costs as a significant factor. The Court stated that in such circumstances, the interpretation should favor the appellant, especially when statutory remedies are being pursued. Consequently, the Court set aside the CESTAT's order dated 16/02/2023 and remitted the matter back to the CESTAT for adjudication on merits, after providing an opportunity of hearing to the parties. The substantial question of law was decided in favor of the appellant, holding that the appellant should not have been non-suited on the ground of limitation without considering the merits when sufficient cause was shown.

Key Issues

1. Whether the High Court has the power to condone the delay of 24 days in filing the present appeal, considering the appellant was pursuing a statutory remedy of rectification, under Section 35G (2A) of the Central Excise Act, 1944? 2. Whether the CESTAT was justified in dismissing the appellant's appeal on the ground of a 52-day delay, when the appellant claimed to have shown sufficient cause due to financial constraints and litigation costs, thereby preventing adjudication on merits? Contentions: Appellant: Submitted that the delay of 24 days in filing the present appeal should be condoned under Section 35G (2A) of the Central Excise Act, 1944, as the appellant was actively pursuing his rectification application. Argued that the CESTAT's dismissal of the appeal on the threshold of delay, without considering the merits, caused substantial damage. Relied on the principle that the cause projected by the appellant was sufficient to condone the delay. The appellant also argued that the CESTAT should have considered the financial litigation costs as a sufficient cause for the delay in filing the appeal before it. Respondent: Opposed the prayer for condonation of delay, arguing that the appellant was required to explain each day's delay and that the CESTAT's order was well-merited as the delay of 52 days was not properly justified or explained.