M/S Palladium Constructions PVT LTD. vs. Principal Commissioner Of Central Tax

Facts

The appellant, M/s. Palladium Constructions Pvt. Ltd., filed a Central Excise Appeal before the High Court of Karnataka challenging an order dated 06.05.2026 passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT had rejected the appellant's application for condonation of delay in filing an appeal against an Order-in-Original dated 23.07.2021 passed by the Principal Commissioner of Central Tax. The delay in filing the appeal before the CESTAT was 1141 days. The appellant attributed the delay to internal communication errors, an employee's resignation, and the impact of COVID-19, stating that the Order-in-Original was received on 27.07.2021 but not promptly acted upon due to operational disruptions and lack of timely information flow to senior management.

Held

The High Court held that the appellant had not shown sufficient cause for the inordinate delay of 1141 days in filing the appeal before the CESTAT. The Court found the appellant's explanation, including the impact of COVID-19, unconvincing, especially considering that the peak of the second wave was in April-May 2021, and by July 2021, there was a return to normalcy. The Court noted that personal hearings were conducted until July 2021, and the appellant was represented, making it difficult to accept COVID-19 disruptions as a justification for such a prolonged delay. The Court also stated that it was not necessary to examine the merits of the appellant's appeal to decide the question of limitation. The Court concluded that the appellant was remiss in taking expeditious steps and that no substantial question of law arose for consideration. Consequently, the appeal was dismissed.

Key Issues

1. Whether the appellant has shown sufficient cause for the inordinate delay of 1141 days in filing the appeal before the CESTAT, as required under the relevant provisions of the Central Excise Act, 1944, and the Rules framed thereunder, particularly in light of the reasons provided by the appellant including internal communication lapses and the impact of COVID-19? Contentions of the Appellant: The appellant argued that the delay was caused by an internal communication error where an employee, Mr. Ram Mohan, received the Order-in-Original on 27.07.2021 and forwarded it to another employee, Mr. Hiten Shah, on 06.08.2021. Due to COVID-19 restrictions and employees working from home, Mr. Shah could not immediately attend to filing the appeal. The appellant also claimed that the employee did not inform senior management, and the order was not captured in their litigation tracking system. Further, Mr. Shah resigned, and the matter was taken up later after discovering the Order-in-Original had been passed. The appellant also sought to argue the merits of the case, referencing the Gujarat High Court decision in Principal Commissioner v. Alembic Limited. Contentions of the Respondent: The respondent (Principal Commissioner of Central Tax) did not explicitly record arguments in the judgment, but their position was implicitly that the delay was not sufficiently explained and should not be condoned.