Full Judgment Text
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5432 OF 2015
(@ SLP(C) N. 27746 OF 2014)
Commissioner of Central Excise,
Commissioner, Delhi – III, Gurgaon ... Appellant
Versus
M/s. KAP Cones, Udyog Vihar,
Phase-V, Gurgaon ...Respondent
J U D G M E N T
Dipak Misra, J.
Leave granted.
2. The respondent, a proprietary concern having two
factories; one situated at 449A, Udyog Vihar, Phase-V,
Gurgaon and the second at Plot No. 29, Secot-5, IMT
Signature Not Verified
Manesar, Gurgaon, is engaged in manufacture of paper
Digitally signed by
Gulshan Kumar Arora
Date: 2015.07.20
17:44:25 IST
Reason:
cones to wrap ice-cream cones and cone biscuits and the
2
said items are chargeable to central excise duty. A
proceeding was initiated against the firm for filing of input
duty credit, capital goods duty credit and further clandestine
removal of the finished product. On 15.7.2011, the
Commissioner adjudicated the matter and disallowed the
Cenvat credit taken and confirmed the demand as indicated
in the show cause notice at the time of commencement of
the proceeding invoking the extended period under the
proviso to Section 11A(1) of the Central Excise Act, 1944 (for
brevity, “the Act”) and directed for confiscation of the seized
goods. The adjudicating authority, as the factual matrix
would uncurtain, imposed penalty of Rs.50 lakhs on the
proprietor of the firm in exercise of the power under Rule 15
of the Cenvat Credit Rules, 2004. The order passed by the
adjudicating Commissioner was received by the concerned
jurisdictional Chief Commissioner on 18.7.2011. After
receipt of the said order, the Committee of the Chief
Commissioners reviewed the same and expressed the
opinion that the decision taken by the Commissioner was
fallacious inasmuch as he had not imposed penalty under
Section 11A(1) which was imposable; and that the
3
Commissioner had overlooked the imposition of penalty on
the Manager and Accounts Manager of the respondent firm
under Rule 26 of the Central Excise Rules, 2006, which was
required in the facts and circumstances of the case. The
review order no. 35 of 2011 was issued on 25.10.2011 under
Section 35-E(1) of the Act and a direction was issued to the
Commissioner to file appropriate application before the
Customs Excise and Service Tax Appellate Tribunal (for
short, “the tribunal) under Section 35-E(4) for correct
determination. The order passed by the Committee was
received by the Commissioner on 31.10.2011.
3. In accordance with the order passed by the Committee
of Chief Commissioners, the Commissioner filed an
application on 16.11.2011 before the tribunal under Section
35-E(4) within one month from the date of communication of
the order of review. Be it noted, along with an application
filed under Section 35-E(4), an application for condonation
of delay was filed for condoning 8 days delay that occurred
in review of the order of the Commissioner by the Committee
of Chief Commissioners, for the Commissioner’s order had
been received by the reviewing authority on 18.7.2011 and
4
the review order which was required to be passed within
three months from the date of communication was passed
after eight days of expiry of the period.
4. It was contended by the revenue before the tribunal
that there was genuine reason for eight days delay in issue
of the review order under Section 35-E(1) by the Committee
of Chief Commissioners and, in any case, when the appeal
had been filed within a period of four months of the receipt
of the order in original, i.e. 15.7.2011, the delay in issue of
the review order under Section 35-E(1) by the Committee of
the Chief Commissioners deserved to be condoned. Reliance
was placed on the Full Bench Decision of the Tribunal
1
rendered in CCE v. Monnet Ispat & Energy Ltd.
5. On behalf of the assessee it was urged that the period
of limitation prescribed for reviewing authority, the
Committee of Chief Commissioner for issuing directions to
the Commissioner in respect of adjudication of order for
filing an appeal to the tribunal was three months from the
date of communication of the order and there was no
1
2010 (257) ELT 239 (Tri-New Delhi) (LB)
5
dispute that the impugned order was received on 18.7.2011
and reviewed order was issued and after expiry of three
months, that is, 25.10.2011 and, therefore, the delay could
not be condoned as per the principle laid down in Central
2
Excise v. M.M. Rubber Co. . To bolster the stand reliance
was also placed on the decision referred by the High Court of
3
Himachal Pradesh in CCE v. Bhillai Wires Ltd.
6. The tribunal referred to Section 35-E of the Act and
interpreting the said provision came to hold that for filing an
appeal before the tribunal or the commissioner (appeal) in
terms of sub-section (4) OF Section 35-E an order passed by
the concerned reviewing authority under Section 35-E (1) or
35E (3) as the case may be, is imperative. The tribunal
opined that filing of an application before the tribunal on the
basis of the review order issued under Section 35-E (1) or 35
(2) has to be completed within the period of one month from
the date of communication of the review order to the
adjudicating authority and on that basis posed the question
whether the delay in completing the first, that is the issue of
order the Committee of Chief Commissioner or the
2
1991 (55) ELT 289
3
2009 (236) ELT 40
6
Commissioner under Section 35E (1) of 35 (2) which is to be
completed within a period of three months could be
condoned by it. It referred to the decision in CCE v. M.M
4
Rubber Co. specially paragraph 18 and came to hold as
follows:-
“Thus, the Apex Court in this case has held
that power under section 35E is a power of
superintendence conferred on a superior
authority to ensure that the subordinate
officers exercise their powers under the Act
correctly and properly and when a time limit is
prescribed for exercise of this power, the same
has been exercised within time-limit and an
order passed beyond the period prescribed
under section 35E(3) would be invalid and
ineffective. When an order passed by the
reviewing authority after expiry of the limitation
period is invalid and ineffective and since such
an order is a prerequisite for filing appeal
before the Tribunal, there is no question of
condonation of delay. Same view has been
taken by the Hon’ble Himachal Pradesh High
Court in the case of Bhillai Wires Ltd. (supra).
The judgment of the Tribunal in case of Monnet
Ispat & Energy Ltd. (supra) is contrary to the
law laid down by the Apex Court in its
judgment in case M.M. Rubber Co. (supra)
which has been followed by Hon’ble Himachal
Pradesh High Court in case of Bhillai Wires Ltd.
(supra).”
In addition to the aforesaid reasoning the tribunal
4
1991 (55) ELT 289 (SC)
7
ascribed another reason that it cannot condone delay in
filing as appeal as it has a duty to see before accepting an
application filed by the a Commissioner under Section 35E
(4) as an appeal against the Commissioner’s order is backed
by valid order passed by the Chief Commissioner under
Section 35E (1). The tribunal held so inasmuch as it has
formed the opinion that when a time limit is prescribed by
statute for reviewing authority, i.e., that is Committee of
Chief Commissioners for exercise of it power of
superintendence and if the said authority issues an order
under the said provision after the expiry of the period of
limitation it would be an invalid and ineffective order and
the tribunal has no power to validate and revive such an
invalid and ineffective order.
7. Being dissatisfied with the aforesaid order the review
preferred Excise Appeal No. 69 of 2013 (O&M) before the
High Court Punjab and Haryana at Chandigarh. The High
Court after enumerating the facts referred to paragraph 10
and 11 of the tribunal judgment and opined thus:-
“A due consideration of relevant statutory
provisions of Section 35(E)(i) and (ii) of the Act
8
reveals that the Tribunal has no jurisdiction to
condone delay in an order passed by the
Committee of Chief Commissioner’s, asking the
Commissioner to file an appeal. The power to
condone delay relates to filing the application.”
Being of this view, the High Court has affirmed the view
expressed by the tribunal and dismissed the appeal. Hence,
the present appeal by special leave.
8. We have heard Mr. P. S. Patwalia, Learned Additional
Solicitor General for Union of India and Dr. G.K. Sarkar,
learned counsel for the respondent.
9. It is necessary to state at the beginning that there is no
cavil over the factual scenario. Therefore, we are only
required to scrutinise in the statutory backdrop and regard
being had to the amendments from time to time and the
proposition stated in the authority in M.M. Rubber (supra)
whether tribunal has jurisdiction to condone the delay in
such a circumstance. We need not have to address the
extent of delay and sufficiency of the cause stated in the
application for condonation of delay, for the centripodal
issue that has arisen for consideration in singularity is
whether the tribunal has the jurisdiction or authority to
9
condone the delay.
10. To appreciate the controversy, first we shall refer to the
legislative history of Sections 35B and 35E of the Act. We
shall only note the provisions existing prior to the Finance
Act, 1984 and the amendments thereafter made effective
from time to time and in this context we shall reproduce the
relevant sub-Sections. Prior to the Finance Act, 1984
relevant sub-Sections 3 to 5 of 35B read as follows:-
“(3) Every appeal under this section shall be
filed within three months from the date on
which the order sought to be appealed against
is communicated to the Collector of Central
Excise, or, as the case may be, the other party
preferring the appeal.
(4) On receipt of notice that an appeal has
been preferred under this section, the party
against whom the appeal has been preferred
may, notwithstanding that he may not have
appealed against such order or any part
thereof, file, within forty-five days of the
receipt of the notice, a memorandum of
cross-objections verified in the prescribed
manner against any part of the order appealed
against and such memorandum shall be
disposed of by the Appellate Tribunal as if it
were an appeal presented within the time
specified in sub-section (3).
(5) The Appellate Tribunal may admit an
appeal or permit the filing of a memorandum of
cross-objections after the expiry of the relevant
10
period referred to in sub-section (3) or
sub-section (4), if it is satisfied that there was
sufficient cause for not presenting it within
that period.”
11. Before the Finance Act 1984, Section 35E read as
follows:-
“(1) The Board may, of its own motion, call for
and examine the record of any proceeding in
which a Collector of Central Excise as an
adjudicating authority has passed any
decision or order under this Act for the
purpose of satisfying itself as to the legality or
propriety of any such decision or order and
may, by order, direct such collector to apply to
the Appellate Tribunal for the determination
of such points arising out of the decision or
order as may be specified by the Board in its
order.
(2) The Collector of Central Excise may, of his
own motion, call for and examine the record of
any proceeding in which an adjudicating
authority subordinate to him has passed any
decision or order under this Act for the
purpose of satisfying himself as to the legality
or propriety of any such decision or order and
may, by order, direct such authority to apply
to the Collector (Appeals) for the
determination of such points arising out of the
decision or order as may be specified by the
Collector of Central Excise in his order.
(3) No order shall be made under sub-section
(1) or sub-section (2) after the expiry of two
years from the date of the decision or order of
the adjudicating authority.
(4) Where in pursuance of an order under
11
sub-section (1) or sub-section (2) the
adjudicating authority or the authorised
officer makes an application to the Appellate
Tribunal or the Collector (Appeals) within a
period of three months from the date of
communication of the order under sub-section
(1) or sub-section (2) to the adjudicating
authority, such application shall be heard by
the Appellate Tribunal or the Collector
(Appeals), as the case may be, as if such
application were an appeal made against the
decision or order of the adjudicating authority
and the provisions of this Act regarding
appeals, including the provisions of
sub-section (4) of section 35B shall, so far as
may be, apply to such application.”
12. The amendment that took place vide Finance Act, 1984
the only change that was brought was in sub-section (3) of
Section 35E whereby the time limit was reduced to one year
from two years, and the rest of the provisions remained the
same. Vide the amendments in 1995, the words “Collector
of Central Excise” in Section 35B were substituted with
“Commissioner of Central Excise”; whereas in Section 35E,
the word “Collector” was substituted with “the
Commissioner” and in sub-section (1) at the place of words
“such collector” the words “Commissioner or any other
Commissioner” were added.
13. As per the amendment made vide Finance Act of 2002,
12
changes were brought in sub-section (3) of Section 35E. The
amended sub-section (3) reads as follows:-
“(3) The Board or Commissioner of Central
Excise, as the case may be, shall, where it is
possible to do so, made order under
sub-section (1) or sub-section (2) within a
period of six months, but not beyond a period
of one year, from the date of the decision or
order of the adjudicating authority.”
14. Thereafter vide Finance Act, 2005, amendments were
brought in Section 35E. At the place of “Board”, “Committee
of Chief Commissioners of Central Excise” was added. In
sub-section (2), the words “such authority” were replaced
with “such authority or any Central Excise Officer
subordinate to him”.
15. Section 35E of Central Excise Act, 1944 (after
amendment vide Finance Act, 2008) reads as follows:-
“(1) The Committee of Chief Commissioners of
Central Excise may, of its own motion, call for
and examine the record of any proceeding in
which a Commissioner of Central Excise as an
adjudicating authority has passed any decision
or order under this Act for the purpose of
satisfying itself as to the legality or propriety of
any such decision or order and may, by order,
direct such Commissioner or any other
Commissioner to apply to the Appellate Tribunal
13
for the determination of such points arising out
of the decision or order as may be specified by
the Committee of Chief Commissioners in its
order.
[ Provided that where the Committee of Chief
Commissioners of Central Excise differs in its
opinion as to the legality or propriety of the
decision or order of the Commissioner of Central
Excise], it shall state the point or points on
which it differs and make a reference to the
Board which, after considering the facts of the
decision or order, if is of the opinion that the
decision or order passed by the Commissioner of
Central Excise is not legal or proper, may, by
order, direct such Commissioner or any other
Commissioner to apply to the Appellate Tribunal
for the determination of such points arising out
of the decision or order, as may be specified in its
order.]
(2) The Commissioner of Central Excise may, of
his own motion, call for and examine the record
of any proceeding in which an adjudicating
authority subordinate to him has passed any
decision or order under this Act for the purpose
of satisfying himself as to the legality or propriety
of any such decision or order and may, by order,
direct such authority or any central Excise
Officer subordinate to him to apply to the
Commissioner (Appeals) for the determination of
such points arising out of the decision or order
as may be specified by the Commissioner of
Central Excise in his order.
(3) Every order under sub-section (1) or
sub-section (2), as the case may be, shall be
made within a period of three months from the
date of communication of the decision or order of
the adjudicating authority.]
14
(4) Where in pursuance of an order under
sub-section (1) or sub-section (2) the adjudicating
authority or the authorised officer makes an
application to the Appellate Tribunal or the
Commissioner (Appeals)] within a period of one
month from the date of communication of the
order under sub-section (1) or sub-section (2) to
the adjudicating authority, such application shall
be heard by the Appellate Tribunal or the
Commissioner (Appeals), as the case may be, as if
such application were an appeal made against
the decision or order of the adjudicating
authority and the provisions of this Act regarding
appeals, including the provisions of sub-section
(4) of section 35B shall, so far as may be, apply to
such application.”
16. By the said Act, amendments were made to
sub-section (3) and sub-section (4) restricting the period for
passing of order under sub-section (1) or sub-section (2) to
three months from the date of communication of the
decision or order of the adjudicating authority and the
period for making application after passing of order under
sub-section (1) or sub-section (2) was reduced to “one
month” instead of “three months”.
17. Vide amendment of 2014, proviso to Clause (3) of
Section 35E was added which reads as follows:-
“Provided that the Board may, on sufficient cause
being shown, extend the said period by another
15
thirty days.”
18. It is apt to note here that the controversy in the instant
case is governed by the 2008 amendments. We have
referred to 2014 amendment, as by the said amendment it
has been stipulated that the Board has power to extend the
time for passing an order under sub-sections (1) and (2) by a
period of 30 days. We shall overt to the impact of the same
at a later stage.
19. At this juncture, it is necessary to state that the
Appellate Tribunal has been conferred power under
sub-section 5 to admit an appeal after the expiry of the
period referred to in sub-section 3 of the said Section. The
tribunal, as has been stated earlier, has ruled that it has no
jurisdiction as the competent authority had not passed the
order within the period of three months and there was delay
of eight days on its part. For the aforesaid view, it has relied
upon the decision in M.M. Rubber (supra). The question
that arose for consideration therein was what was the
relevant date for the purpose of calculation of the period of
one year provided under Section 35E(1)? In the said case, it
was contended before the tribunal by the assessee that the
16
relevant date of the Collector’s (adjudicating authority) order
for the purposes of Section 35E(3) should be taken as
November 28, 1984, the date when the order was passed
and not December 21, 1984 when it was received by the
Department and on that basis the order of the Board under
Section 35E(1) of the Act should be held as beyond the
period of one year from the date of decision or order of the
adjudicating authority and, therefore, the application before
the tribunal under Section 35E(4) of the Act was
incompetent. The tribunal accepted the said contention and
held that application was not maintainable.
20. Before this Court, it was contended by the revenue that
mere writing an order in file kept in the office is no order in
the eyes of law and, therefore, limitation would start only
from the date of receipt of the order by the revenue. A
submission was also canvassed that departmental
authorities and the private respondents are to be treated
equally as aggrieved persons for the purposes of calculating
the time for making the direction under Section 35E(3) of
the Act. The Court scanned the anatomy of Section 35
especially Section 35E and proceeded to interpret the words
17
“from the date of decision or order”. In that context, the
Court referred to number of authorities and proceeded to
state thus:-
“12. It may be seen therefore, that, if an
authority is authorised to exercise a power or do
an act affecting the rights of parties, he shall
exercise that power within the period of limitation
prescribed therefor. The order or decision of such
authority comes into force or becomes operative
or becomes an effective order or decision on and
from the date when it is signed by him. The date
of such order or decision is the date on which the
order or decision was passed or made : that is to
say when he ceases to have any authority to tear
it off and draft a different order and when he
ceases to have any locus paetentiae. Normally
that happens when the order or decision is made
public or notified in some form or when it can be
said to have left his hand. The date of
communication of the order to the party whose
rights are affected is not the relevant date for
purposes of determining whether the power has
been exercised within the prescribed time.
13. So far as the party who is affected by the
order or decision for seeking his remedies against
the same, he should be made aware of passing of
such order. Therefore courts have uniformly laid
down as a rule of law that for seeking the remedy
the limitation starts from the date on which the
order was communicated to him or the date on
which it was pronounced or published under
such circumstances that the parties affected by it
have a reasonable opportunity of knowing of
passing of the order and what it contains. The
knowledge of the party affected by such a
decision, either actual or constructive is thus an
18
essential element which must be satisfied before
the decision can be said to have been concluded
and binding on him. Otherwise the party affected
by it will have no means of obeying the order or
acting in conformity with it or of appealing
against it or otherwise having it set aside.”
After so stating, the Court proceeded to hold thus:-
“18. Thus if the intention or design of the
statutory provision was to protect the interest of
the person adversely affected, by providing a
remedy against the order or decision any period
of limitation prescribed with reference to invoking
such remedy shall be read as commencing from
the date of communication of the order. But if it
is a limitation for a competent authority to make
an order the date of exercise of that power and in
the case of exercise of suo moto power over the
subordinate authorities’ orders, the date on
which such power was exercised by making an
order are the relevant dates for determining the
limitation. The ratio of this distinction may also
be founded on the principle that the government
is bound by the proceedings of its officers but
persons affected are not concluded by the
decision.”
21. After so stating, the three-Judge Bench opined that
Section 35-E comes under the latter category of an
authority exercising its own powers under the Act. It is not
correct to equate the Board, as contended by the revenue,
to one of the two parties to a quasi-judicial proceeding. The
Court further held that the power under Section 35-E is a
19
power of superintendence conferred on a superior authority
to ensure that the subordinate officers exercise their powers
under the Act correctly and properly and, therefore, it is not
correct to equate the Board to one of the two parties to a
quasi-judicial proceeding before the Collector and the
Board’s right under Section 35-E to the exercise of the right
of appeal by an aggrieved assessee from an order passed to
its prejudice, and, therefore, when a time limit is provided
for exercise of such a power, that should be exercised
within specified period from the date of the order sought to
be reconsidered. After so observing, the Court proceeded to
state thus:-
“...To hold to the contrary would be inequitable
and will also introduce uncertainties into the
administration of the Act for the following reason.
There appears to be no provision in the Act
requiring the endorsement, by a Collector, of all
orders passed by him to the Board. If there is
such a practice in fact or requirement in law, the
period of one year from the date of the order is
more than adequate to ensure action in
appropriate cases particularly in comparison with
the much shorter period an assessee has within
which to exercise his right of appeal. If, on the
other hand, there is no such requirement or
practice and the period within which the Board
can interfere is left to depend on the off-chance of
the Board coming to know of the existence of a
20
particular order at some point of time, however
distant, only administrative chaos can result. We
are, therefore, of the opinion that the period of
one year fixed under sub-section (3) of Section
35-E of the Act should be given its literal
meaning and so construed the impugned
direction of the Board was beyond the period of
limitation prescribed therein and therefore invalid
and ineffective.”
22. The said decision has to be understood in its proper
context. The core issue that arose for consideration was to
the relevant date for the purpose of computation of the
period of one year as stipulated under Section 35-E(3) of the
Act. The controversy in the case related to the year 1984
and the provision was different. Section 35(3) at that point
of time reads as follows:-
“35(3). No order shall be made under sub-section
(1) of sub-section (2) after the expiry of one years
from the date of the decision or order of the
adjudicating authority.”
Sub-section (4) of Section 35-E(4) provided that
appeals should be filed within a period of three months
from the date of communication of the order under
sub-section (1) or (2) to the adjudicating authority. The
Court has taken note of the fact that period that was given
21
by the legislature to the revenue was one year which is
more than adequate to take appropriate action in proper
cases in comparison with the much shorter period within
which the assessee has to exercise his right of appeal. The
Court gave emphasis on the administrative chaos that
would result if a further period was granted and accordingly
opined that the statutory provision was to be given a literal
meaning. As is noticeable, the amendment made by the
Finance Act, 2008, the Committee of Chief Commissioners
was required to pass an order within three months from the
date of communication of the decision or the order. This
period of three months is identical to the period of three
months stipulated in Section 35-B of the Act. It is apt to
note that sub-section (4) to Section 35-E of the Act,
however, grants right and authorises the adjudicating
authority or adjudicating officer to file an appeal within a
period of one month from the date of the decision or the
order. The provision also stipulates that if such an
application is made against the decision or order, the
provisions of the Act inclusive of a provision of the
sub-section (4) of Section 35 so far as may be shall apply to
22
such applications. We may note with profit that the
stipulation as to the applicability of sub-section (4) to
Section 35 has always existed. However, its relevance,
applicability and importance underwent a change with the
amendment made by Finance Act, 2008 prescribing a
period of three months.
23. Thus, as per the scheme of the Act, sub-section (4) of
Section 35-B(5) of the Act authorises the appellate tribunal
to admit an appeal or permit filing of memorandum of
cross-objections after expiry of relevant period if the
tribunal is satisfied there was sufficient cause for not
presenting the appeal within that period. As stated earlier,
the power under sub-section (4) of Section 35-B has been
made applicable to appeals preferred following the
administrative procedure prescribed under Section 35-E of
the Act. The statutory position as it existed in 1984, as we
find, has undergone a change by the amendment made
under the Finance Act, 2008. Under the changed
circumstances, it would not be appropriate to restrict and
bar an application of the provisions of sub-section (4) of
Section 35-E to the period after passing of an order under
23
sub-sections (1) and (2) of Section 35-E of the Act. We are
inclined to think so as the amendment made by the Finance
Act, 2008, the legislature, in effect, has equated the period
of limitation prescribed under sub-section (3) of Section
35-E with the period prescribed for the Committee of the
Chief Commissions under Section 35-E of the Act. Earlier,
that is, before the Finance Act, 2005, the legislature had
prescribed and given a longer period of limitation to the
Board or the Committee of the Chief Commissioners which
could be two years or one year. The said extended period or
concession granted to the Board or the Committee of Chief
Commissioners was withdrawn by the Finance Act, 2008.
The only concession available to the revenue is the
additional period of one month. The postulates regarding
approval, as we perceive, is in favour of the assesses as the
mandate is that the Committee of Chief Commissioners
would apply its mind before recommending to file an appeal,
for frivolous and unnecessary appeals are not filed. In fact,
the provision has been enacted to prevent filing of
unwarranted and undeserving appeals. Simultaneously, it
also engrafts a procedure by which there is assured
24
transparency and objectivity against loss of revenue and an
erroneous decision goes on unchallenged. In that event, it
would affect the fundamental sanctity behind the apposite
fiscal principle, which is an inseparable part of good
governance.
24. There can be no scintilla of doubt that an order passed
or decision taken under Section 35-E by the
Board/Committee of Chief Commissioners is the date of the
order or decision. It is not a quasi-judicial order
determining a dispute or rights of parties, for there is no
adjudication. We have already referred to the proviso that
has been added to sub-section (3) to Section 35-E by
Finance Act, 2014 wherein it is stipulated that the Board
has the power to extend the time for passing an order under
sub-sections (1) and (2) by a period of 30 days. We are
disposed to think as it is evident that the legislature is
aware of the fact that there can be delay in filing of the
appeals in spite of the time limit and procedure prescribed
in Section 35-E of the Act and, therefore, Section 35-B(4)
has been made applicable to the appellants preferred after
necessary approval/sanction/direction under Section 35-E
25
of the Act. The reduction of the period has ensured equality
and parity between the appeals, one preferred by the
assessee and the other preferred by the revenue. The only
thing is that the appeal preferred by the revenue has to be
after satisfaction of conditions mentioned in Section 35-E of
the Act. It is difficult to conceive that after the amendment
brought in by the Finance Act, 2008 that the legislative
intent is to put the revenue or the State at a disadvantage.
It is not the intention of the legislature to deny and prevent
the revenue from preferring an appeal which is barred by
limitation or the delay in preferring an appeal cannot be
condoned even if sufficient cause is shown. If such an
interpretation is placed after 2008 amendment, it would be
counter productive and not in consonance with the
legislative intent which is clear as Section 35-B(4) has been
made applicable to appeals which are preferred after taking
recourse to the mechanism provided under Section 35-E.
25. As stated earlier, we must advert to the proviso
inserted to sub-section (3) to Section 35-E by the Finance
Act, 2014. The said proviso has a different purport. It
empowers the Board to extend the time of passing of an
26
order under sub-sections (1) and (2) by a period of 30 days.
Once an order has been passed by the Board in exercise of
the said power under the proviso, there would be no need
and necessity to file an application seeking condonation of
delay for the periods specified, which cannot exceed 30
days. The insertion of the said proviso by Finance Act,
2014 does not negate and is not contrary to the legislative
mandate by Section 35-E as it existed prior to or after
insertion of the said proviso.
26. Learned counsel has commended us to the decision in
Commissioner of Customs and Central Excise v. Hongo
5
India Private Limited and Another . In the said case, the
Court was dealing with Section 35-H which relates to
limitation for filing a reference to the High Court. In view of
the specific language of the said provision which provided
only for 180 days period or no further period for filing of a
reference, it had been held that the period is not extendable
but absolute and in that context it had been held Section 5
of the Limitation Act would not be applicable. Thus, the
authority in the said case is distinguishable. Be it noted,
5
(2009) 5 SCC 791
27
the said situation having changed by inserting sub-section
3A in Section 35-H of the Central Excise Act w.e.f. 1.7.1999.
27. At this juncture, we think it appropriate to refer to the
Full Bench decision of the tribunal in Monnet Ispat &
Energy Ltd. (supra). In the said case, interpreting the
provisions, the Full Bench of the tribunal has recorded the
following conclusion:-
“The Tribunal has ample power to condone the
delay in filing the appeal including the one filed
under Section 35E(4) of the said Act. The period
which can be condoned in relation to filing of the
appeal under Section 35E(4) of the said Act would
include the period availed by the review
committee in terms of Section 35E(1) or 35E(2) of
the said Act. As regards the appeals by the
Department in terms of Section 35E(4), the same
should be filed within one month from the date of
communication of the order under sub-section (1)
or sub-section (2) of the said section but not
beyond four months from the date of
communication of order of the adjudicating
authority to the review committee. In case there
is any delay in this regard, the same can be
condoned in exercise of powers under Section
35B(5), on being satisfied about sufficient cause
for such delay and power to condone the delay
would include the period availed under Section
35E(1) or (2) by the reviewing committee to decide
about filing of the appeal.”
28. In our considered opinion, the analysis made by the
Full Bench is correct in view of the opinion expressed by us
28
in the preceding paragraph and accordingly we hold the
said view to the correct. We are obliged to note with profit
that the members deciding the lis by the impugned order
should have kept themselves abreast to the Full Bench
decision of the tribunal so that there would not have been
two views as regards the same proposition.
29. Resultantly, the appeal is allowed, the order passed by
the tribunal is set aside and the matter is remanded to it for
consideration of the application for condonation of delay on
its own merits. There shall be no order as to costs.
.............................J.
[Dipak Misra]
..........................., J.
[Prafulla C. Pant]
New Delhi
July 20, 2015
ITEM NO.1B COURT NO.5 SECTION III
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 27746/2014
(Arising out of impugned final judgment and order dated 22/08/2013
in CEA No. 69/2013 passed by the High Court of Punjab & Haryana at
Chandigarh)
COMMISSIONER OF CENTRAL EXCISE,
COMMISSIONER, DELHI-III, GURGAON Petitioner(s)
VERSUS
M/S KAP CONES, UDYOG VIHAR, PHASE-V, GURGAON Respondent(s)
Date : 20/07/2015 This petition was called on for judgment today.
For Petitioner(s) Mr. P.S. Patwalia, ASG
Mrs. J. Smita Rao, Adv.
Mr. Tushar Bakshi, Adv.
Mr. B. Krishna Prasad, AOR
For Respondent(s) Dr. G.K. Sarkar, Adv.
Ms. Malabika Sarkar, Adv.
Ms. Susmita Lal, AOR
Mr. Prasant Kumar, Adv.
Hon'ble Mr. Justice Dipak Mishra proncounced the judgment of
the Bench consisting His Lordship and Hon'ble Mr. Justice Prafulla
C. Pant.
Leave granted.
The appeal is allowed in terms of the signed reportable
judgment.
(Gulshan Kumar Arora) (H.S. Parasher)
Court Master Court Master
(Signed reportable judgment is placed on the file)