Kamal Electricals vs Customs,Excise and Service Tax Appellate Tribunal

Ajay Kumar Mittal, J.—This order shall dispose of STA Nos. 2 and 3 of 2014 as according to the learned counsel for the appellant, the facts involved therein are similar and the grounds seeking condonation of delay before the Commissioner (Appeals) in both the appeals are identical. In STA No. 2 of 2014, there was a delay of more than 20 months whereas in STA No. 3 of 2013, there was a delay of more than 24 months in filing the appeal before the Commissioner (Appeals). For brevity, the facts are being taken from STA No. 2 of 2014. This appeal has been filed by the assessee u/s 35G of the Central Excise Act, 1994 (in short "the Act") read with Section 83 of the Finance Act, 1994, against the orders dated 10.9.2013 (Annexure A-6) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi; dated 6.2.2013 (Annexure A-4) passed by the Commissioner (Appeals), Customs and Central Excise, Chandigarh and dated 31.1.2013 (Annexure A-2) passed by the Deputy Commissioner, Central Excise Division, Ropar, claiming the following substantial questions of law:--

(i) Whether the order passed by the ld. CESTAT holding the appeal of the appellant is time barred, can be stated to be legal and correct as per facts on records?

(ii) Whether Section 5 of Limitation Act is applicable in the present case or not?

(iii) Whether mere technicalities can come in the way of Administration of Justice?

(iv) Whether a good case on merit can be ignored only on the point of delay, which is bona fide?

(v) Whether manifest injustice has been caused to the appellant or not?

(vi) Whether a casual approach is required to be taken on delay in the cases like present one?

The facts necessary for adjudication of the present appeal as narrated therein may be noticed. The appellant provided services under material handling contract to M/s. National Fertilizers Ltd. (NFL). It also provided services for maintenance of Ash pond and maintenance of fire services and operation/upkeep of compressed air filling stations etc. to M/s. NFL during the period July 2003 to March 2006. A show cause notice dated 22.12.2006 (Annexure A-1) was issued to the appellant demanding service tax to the tune of Rs. 2,89,692/- along with interest as it received a sum of Rs. 28,82,504/- during the period July 2003 to March 2006 for providing management, maintenance or repair services to M/s. NFL. The appellant filed reply to the said show cause notice. The adjudicating authority vide order dated 31.1.2011 (Annexure A-2) confirmed the demand of service tax and also imposed penalty of equal amount. Feeling aggrieved, the appellant filed an appeal dated 7.1.2013 (Annexure A-3) before the Commissioner (Appeals). As the appeal was barred by limitation, an application u/s 5 of the Limitation Act was also filed for condonation of delay. The Commissioner (Appeals) vide order dated 6.2.2013 (Annexure A-4) rejected the application for condonation of delay and dismissed the appeal being time barred. Still dissatisfied with the order dated 6.2.2013 (Annexure A-4), the appellant filed an appeal before the Tribunal who vide order dated 10.9.2013 (Annexure A-6) dismissed the appeal being barred by limitation. Hence, the present appeal.

We have heard learned counsel for the appellant.

The primary question that arises for consideration in these appeals is whether there was sufficient cause for condonation of delay in filing the appeals before the Commissioner (Appeals) which were belated.

Examining the legal position relating to condonation of delay u/s 5 of the Limitation Act, 1963 (in short, the "1963 Act") it may be observed that the Hon''ble Supreme Court in Oriental Aroma Chemical Industries Ltd. Vs. Gujarat Industrial Development Corporation and Another, laying down the broad principles for adjudicating the issue of condonation of delay, in paras 14 & 15 observed as under:--

"14. We have considered the respective submissions. The law of limitation is founded on public policy. The Legislature does not prescribe limitation with the object of destroying the rights of the parties but to ensure that they do not resort to dilatory tactics and seek remedy without delay. The idea is that every legal remedy must be kept alive for a period fixed by the Legislature. To put it differently, the law of limitation prescribes a period within which legal remedy can be availed for redress of the legal injury. At the same time, the courts are bestowed with the power to condone the delay, if sufficient cause is shown for not availing the remedy within the stipulated time.

The expression "sufficient cause" employed in Section 5 of the Indian Limitation Act, 1963 and similar other statutes is elastic enough to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice. Although, no hard and fast rule can be laid down in dealing with the applications for condonation of delay, this Court has justifiably advocated adoption of a liberal approach in condoning the delay of short duration and a stricter approach where the delay is inordinate-Collector (L.A.) v. Katiji N. Balakrishnan v. M. Krishnamurthy and Vedabai v. Shantaram Baburao Patil."

It was further noticed by the Hon''ble Apex Court in R.B. Ramlingam Vs. R.B. Bhvaneswari, as under:--

"...It is not necessary at this stage to discuss each and every judgment cited before us for the simple reason that Section 5 of the Limitation Act, 1963 does not lay down any standard or objective test. The test of "sufficient cause" is purely an individualistic test. It is not an objective test. Therefore, no two cases can be treated alike. The statute of limitation has left the concept of "sufficient cause" delightfully undefined, thereby leaving to the Court a well-intentioned discretion to decide the individual cases whether circumstances exist establishing sufficient cause. There are no categories of sufficient cause. The categories of sufficient cause are never exhausted. Each case spells out a unique experience to be dealt with by the Court as such."

It was also recorded that:--

"For the aforestated reasons, we hold that in each and every case the Court has to examine whether delay in filing the SLP stands properly explained. This is the basic test which needs to be applied. The true guide is whether the petitioner has acted with reasonable diligence in the prosecution of his appeal/petition..."

From the above, it emerges that the law of limitation has been enacted which is based on public policy so as to prescribe time limit for availing legal remedy for redressal of the injury caused. The purpose behind enacting law of limitation is not to destroy the rights of the parties but to see that the uncertainty should not prevail for unlimited period. u/s 5 of the 1963 Act, the courts are empowered to condone the delay where a party approaching the court belatedly shows sufficient cause for not availing the remedy within the prescribed period. The meaning to be assigned to the expression "sufficient cause" occurring in Section 5 of the 1963 Act should be such so as to do substantial justice between the parties. The existence of sufficient cause depends upon facts of each case and no hard and fast rule can be applied in deciding such cases.

The Hon''ble Apex Court in Oriental Aroma Chemical Industries Ltd. (supra) and R.B. Ramlingam''s cases (supra) noticed that the courts should adopt liberal approach where delay is of short period whereas the proof required should be strict where the delay is inordinate. Further, it was also observed that judgments dealing with the condonation of delay may not lay down any standard or objective test but is purely an individualistic test. The court is required to examine while adjudicating the matter relating to condonation of delay on exercising judicial discretion on individual facts involved therein. There does not exist any exhaustive list constituting sufficient cause. The applicant/petitioner is required to establish that inspite of acting with due care and caution, the delay had occurred due to circumstances beyond his control and was inevitable.

Adverting to the factual matrix in this case, we do not find any merit in the appeals. The question regarding whether there is sufficient cause or not depends upon each case and primarily is a question of fact to be considered taking into totality of events which had taken place in a particular case. According to the learned counsel for the appellant, the proprietor being under medical treatment could not attend and pursue the matter and, therefore, failed to file the appeals within the stipulated period of limitation. It was urged that the delay, if any, has occurred in the aforesaid circumstances in filing the appeals before the Commissioner (Appeals). Learned counsel further argued that the delay was unintentional and due to the circumstances beyond the control of the appellant.

In the present case after appreciating the matter it cannot be said that there was sufficient cause for condonation of delay. The adjudicating authority had decided the matter on 31.1.2011 and a copy thereof was sent to the appellant on the same day. However, the appeal before the Commissioner (Appeals) was required to be filed on or before 30.4.2011, i.e. within the stipulated period of limitation of three months. But the appellant filed the appeal before the Commissioner (Appeals) on 8.1.2013, after a delay of more than 20 months. In the other appeal, there is delay of 24 months in filing the appeal. The plea of the appellant is that the proprietor of the assessee-firm was not in a good state of mind and was going under medical treatment for the last three years and, therefore, could not pursue the matter. Such plea does not stand substantiated in the facts and circumstances of the present case. There has been an inordinate delay of more than 20 and 24 months in filing the appeals. In view of the above, no question of law much less a substantial question of law arises in these appeals. Accordingly, finding no merit in the appeals, the same are hereby dismissed.