Allowed

Yash Chemicals v. the Union of India and Ors.

Bombay HC11 Mar 2014CEA/2/2013

Case brief

AI extract

What is this about?

This appeal allowed the appellant to condone a delay of 350 days in filing an appeal before the Tribunal. The High Court quashed the Tribunal's order rejecting the condonation application, holding that the appellant acted with due diligence and was prevented by sufficient cause due to their consultant's failure, notwithstanding contradictory statements made to the lower authorities.

What did the court decide?

The impugned order of the Tribunal rejecting the application for condonation of delay is quashed and set aside. The delay of 350 days is condoned. The appeal is to be decided on merits within six mont

Yash Chemicals Vs the Union of India and Ors. — Customs and Excise | Bombay HC (2014)

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CEA 2/13

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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BENCH AT AURANGABAD

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 CENTRAL EXCISE APPEAL NO.02/2013

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Yash Chemicals,
having its factory at Plot
No.M-149, M.I.D.C., Waluj,
Tq. & Dist.Aurangabad.
...Appellant..

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Versus

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1] The Union of India, through the Finance Secretary, South Block, New Delhi.

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2] The Commissioner of Central Excise, Customs and Service Tax, Aurangabad, Town Centre, N-5, CIDCO, Aurangabad.

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3] The Assistant Commissioner, Central Excise & Customs, Aurangabad Division-2, Town Centre, N-5, CIDCO, Aurangabad.

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...Respondents...

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 .....

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Shri Satish M. Godsay, Advocate for appellant.

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Shri R.P. Phatke, Standing Counsel for respondent nos.1
to 3.

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 .....

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CEA 2/13

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CORAM: R.M. BORDE & A.M. BADAR, JJ.

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DATE: 11.03.2014

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ORAL JUDGMENT (Per A.M. Badar, J.) :

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1]Heard learned counsel for the parties.

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2]This appeal is admitted on the following substantial
questions of law raised by the appellant:-

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a]Whether rejection of prayer for delay

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condonation holding that reason cited for delay is
not sufficient for condonation of delay by the
Tribunal is proper ?

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b]Whether the latches and negligence on the
part of the consultant / Advocate without there
being any fault on the part of the litigant, can
be allowed to frustrate the appeal on merits ?

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c]Whether a meritorious appeal involving
substantive merit can be allowed to be frustrated
on account of technical ground of delay ?

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3]By consent of learned counsel for the parties, the
appeal is taken up for final hearing forthwith.

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CEA 2/13

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Considering the short question involved in the
appeal and particularly because the parties have placed
on record the entire material necessary for disposal of
the instant appeal, calling of record and proceedings is
dispensed with.

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5]The appellant is a manufacturer of craft paper, an
excisable item under the Central Excise Tariff Act, 1985.
The appellant was served with a show cause cum demand
notice dated 19.2.2009 claiming central excise duty and
other cess amounting to Rs.2,23,536/-. Apart from that,
the appellant was asked to show cause as to why penalty
should not be imposed on him. Contention of the
respondents in brief was to the effect that the appellant
availed certain benefits, though it was not legally
entitled for the same. The appellant duly replied this
show cause notice and contended that the demand of duty
and cess is unfair.

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6]On 3.11.2009, the respondent no.3 - Assistant

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Commissioner passed an order confirming the demand and
cess, which was already paid by the appellant. The
appellant was further directed to pay penalty amounting

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CEA 2/13

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to Rs.2,23,536/-. Being aggrieved by this order, the
appellant filed an appeal before the Commissioner
(Appeals). On 9.4.2010, that appeal met fate of
dismissal. It was noted by the learned Commissioner
(Appeals) that the appellant failed to avail opportunity
of personal hearing.

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7]The appellant thereafter instructed his consultant
to file further appeal challenging the said order of the
Commissioner (Appeals) before the Customs, Excise and
Service Tax Appellate Tribunal. It is the case of the
appellant that its representative had duly instructed its
counsel to file an appeal and accordingly on 21.5.2010

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had handed over the requisite demand drafts to its
consultant. According to the appellant, it was in June,
2011, when it received notice of recovery, it found that
its consultant failed to file an appeal. Thereafter, the
appellant, through its consultant, filed an appeal, which
was accompanied by an application for condonation of
delay. That appeal was listed before the learned
Customs, Excise and Service Tax Appellate Tribunal twice.
Ultimately, on 14.3.2012, noting absence of the appellant
on that date as well as the date earlier thereto, the

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CEA 2/13

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learned Tribunal was pleased to dismiss the application
for condonation of delay for non-prosecution.
Consequently, the appeal as well as the stay application
came to be rejected.

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8]The appellant thereafter filed an application for
restoration of the appeal. On 11.10.2012, the learned
Customs, Excise and Service Tax Appellate Tribunal was
pleased to restore the appeal to the file. The
application for condonation of delay was taken up for
hearing and on the very same day, the learned Tribunal
was pleased to reject the application for condonation of
delay by holding that the appellant failed to show
sufficient cause in not filing the appeal within
limitation. It was further observed that the appellant
has taken contradictory stand by pleading that he was not
in a position to decide whether to lodge an appeal or not
and that during the course of arguments, the appellant
blamed his counsel. The learned Tribunal observed that
with such a contradictory stand, it cannot be said that
the appellant has made out sufficient cause for not
filing an appeal within limitation.

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9]It was pointed out to us that the entire central
excise duty cess, apart from penalty has already been
deposited by the appellant. On this backdrop, perusal of
the application for condonation of delay filed by the
appellant shows that the appellant had contended that the
delay was due to procedure required to be adopted by the
appellant. It was further mentioned therein that the
appellant was diligently pursuing his matter.

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10]True it is that the learned Tribunal was pleased to
reject the application for condonation of delay by
holding that contrary stand is taken by the appellant,
but one will have to keep in mind that the primary duty
of the Tribunal is to adjudicate the dispute on its own

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merit rather than to adhere to the technicalities of law.
In the case at hand, the appellant had already deposited

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the entire dues and penalty and he was diligently
prosecuting his appeal. So far as inaction of his
consultant is concerned, perusal of presentation form
submitted while lodging the appeal, shows that the
appellant had in fact appointed the consultant for
prosecuting its appeal. Successive orders of the

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CEA 2/13

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authorities, such as, the Commissioner (Appeals) as well
as the Tribunal do show that the consultant engaged by
the appellant for prosecuting the appeal remained absent.

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In the wake of this factual position, the appellant was
justified in contending before the learned Tribunal that
its counsel failed to appear when the matter was taken up
for hearing by the learned Tribunal. This argument ought
not to have been used against the appellant by the
learned Tribunal. By now, it is well settled that the
expression "sufficient cause" needs to be pragmatically

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construed so as to advance the cause of justice. No mala-fides can be imputed on the appellant for delay in lodging the appeal and it was reasonably diligent in prosecuting the appeal. As such, the impugned order of the learned Tribunal is not sustainable in law and deserves to be quashed and set aside. We, therefore, hold that the appellant was prevented by sufficient cause in not filing an appeal within limitation.

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11]In the result, the appeal is allowed. The impugned
order of the learned Customs, Excise and Service Tax
AppellateTribunalpassedonApplication
No.E/Roa/1536/2012-Mum in Appeal No.E/1173/2011-Mum on

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CEA 2/13

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11.10.2012 rejecting the application for condonation of
delay in lodging the appeal, is quashed and set aside.
The delay of about 350 days in lodging the appeal is
condoned.

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12]The learned Tribunal is directed to decide the

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appeal lodged by the appellant on its own merits
according to law as expeditiously as possible and within
a period of six months from the date of communication of
this decision.

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13]The appeal is disposed of accordingly. There shall
be no order as to costs.

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14]In view of disposal of the appeal as above, Civil

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Application No.1693/2013 for stay of the impugned orders
does not survive and the same is also disposed of.

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(A.M. BADAR, J.) (R.M. BORDE, J.)

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ndk/c1131435

Yash Chemicals v. the Union of India and Ors.

Case brief

What is this about?

What did the court decide?

Yash Chemicals v. the Union of India and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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