Kirmani Fabricators vs Commissioner of Central Excise

Harsha Devani, J.—By this appeal tinder Section 35G of the Central Excise Act, 1944 (hereinafter to be referred to as, "the Act"), the appellant has challenged the order dated 10th March 2014 made by the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (hereinafter referred to as "the Tribunal") whereby, the application made by the applicant seeking condonation of the delay caused in preferring the appeal has been turned down, and the stay application as well as the appeal have also been dismissed. Mr. D.K. Trivedi, learned advocate for the appellant invited attention to the application for condonation of the delay made by the appellant before the Tribunal to submit that sufficient cause has been made out for condoning the delay of 221 days in preferring the appeal. It was submitted that the appellant had entered into a contract with M/s Indian Rayon, Veraval for carrying out the work of replacing old and worn out motor pumps, compressive pump etc. with new ones and building and replacing platform for installing machinery in the factory, replacing old and torn pipes fitted in the plant by cutting and welding works, replacing parts of machinery installed at one place to another as per the requirement of the plant. Thus, essentially the appellant is engaged in doing labour work and was not aware of the intricacies of law. It was submitted that the concerned Chartered Accountant did not give proper guidance to the appellant as a consequence whereof the appellant could not file the appeal within the prescribed period of limitation and there was a delay of 221 days in filing the appeal before the Tribunal. It was submitted that the Tribunal failed to appreciate the fact that the appellant being a layman and a semi-literate person relied upon the consultant for proper guidance, and was, therefore, not justified in not condoning the delay and dismissing the appeal. It was, accordingly, urged that the appeal does give rise to a substantial question of law and deserves to be allowed.

Opposing the appeal, Mr. H.C. Buch, learned standing counsel for the respondent, submitting that the Tribunal, while rejecting the application for condonation of delay has duly considered the explanation advanced by the appellant and has not found the same to be satisfactory. Thus, it cannot be said that the discretion exercised by the Tribunal is in any manner improper or unjust so as to warrant interference. The appeal being devoid of merit, therefore, deserves to be dismissed.

Having regard to the submissions made by the respective parties as well as to the facts of the case, this court is of the view that the appeal merits consideration. Hence, Admit. The following substantial question of Jaw arises for consideration.

"Whether on the facts and in the circumstances of the case, the Tribunal was justified in not condoning the delay caused in preferring the appeal?"

The facts are not in dispute. Against the order-in-appeal dated 11th January, 2013 made by the Commissioner (Appeals), the appellant herein preferred an appeal before the Tribunal; however, there was a delay of 221 days in preferring the said appeal and hence, the appellant also move an application seeking condonation of the delay caused in preferring the appeal. By the impugned order, the Tribunal has rejected the application for condonation of appeal and dismissed the appeal as well as the application for stay.

As can be seen from the averments made in the memorandum of the application for condonation of delay filed before the Tribunal, it is the case of the appellant that he was engaged in carrying out erection, commissioning and installation mainly for M/s. Aditya Biria Nuvo Limited (Rayon Division-Veraval) and had obtained Service Tax registration in the month of September 2009 and had been paying service tax since then. Against the order-in-original passed by the adjudicating authority, the appellant had preferred appeal before the Commissioner (Appeals) which came to be dismissed by an order dated 11th January, 2013. The appellant, not being aware of the provisions relating to Service Tax, seems to have approached the Chartered Accountant and other consultants seeking advice as to what is the proper remedy against the order-in-appeal. However, the appellant was not given any proper guidance and hence, could not prefer the appeal within the prescribed period of limitation. It was only after the appellant contacted the learned advocate who is representing him before the Tribunal, that proper guidance was received by him and he could file the appeal before the Tribunal. The Tribunal, in the impugned order, has briefly recorded the explanation advanced by the appellant and has held that in its considered view, it found that the reasoning which has been put-forth is unconvincing for the reason that before the first appellate authority, the appellant had preferred appeal in time and had prosecuted the same. The Tribunal further took note of the fact that the appellant was represented by a Chartered Accountant there and found the explanation given by the appellant to be unacceptable and dismissed the application for condonation of delay and consequently, also dismissed the stay application as well as the appeal. This in sum and substance forms the reasoning given by the Tribunal.

As is apparent from the facts noted hereinabove, the appellant had preferred the appeal before the Tribunal after a delay of 221 days. The reason given for such delay as stated in the memorandum of the application for condonation of delay is that the appellant was not properly guided in the matter of preferring appeal and was also worried about the huge amount that he would be required to pay at the time of preferring the appeal. From the facts stated in the memorandum of application, it appears that the work carried out by the appellant is mainly in the nature of labour work, as such, the case put forth by the appellant that he were not aware of the intricacies of law, and therefore, could not approach the Tribunal in time appears to be quite plausible. It appears that the appellant was represented by a Chartered Accountant before the appellate authority and, therefore, relied upon him to give him proper guidance. However, since no proper guidance was given till the appellant contacted the learned advocate who represents him before the Tribunal, there was a delay in preferring the appeal. In the opinion of this court, the appellant had all the reason to hold a reasonable belief that he would be given proper guidance by the Chartered Accountant who had represented him before the appellate authority. The Tribunal, while dismissing the application for condonation of delay on the ground that the appellant was represented by a Chartered Accountant before the appellate authority, failed to take into consideration the explanation put forth by the appellant that he was misguided by the Chartered Accountant. The impugned order, therefore, suffers from lack of proper application of mind to the facts of the case on the part of the Tribunal. Moreover, from the averments made in the application, it appears that the appellant had, at no point of time, given up the cause nor does it appear as if there was any gross negligence or laches on the part of the appellant in prosecuting the appeal. It is by now well settled that the court while considering an application for condonation of delay should adopt a pragmatic approach which furthers the cause of justice and not a narrow or pedantic approach. In the present case, the delay in preferring the appeal is not so huge so as to cause any undue prejudice to the respondent. Under the circumstances, if the delay is condoned, the only consequence would be that the appellant''s appeal would be heard on merits. In the aforesaid premises, in the interest of substantial justice, the delay caused in preferring the appeal before the Tribunal is requited to be condoned. The question is accordingly, answered in the negative, that is, in favour of the appellant and against the revenue. The Tribunal was not justified in not condoning the delay caused in preferring the appeal. In the result, the appeal succeeds and is, accordingly, allowed. The impugned order passed by the Tribunal is hereby quashed and set aside. The delay caused in preferred the appeal before the Tribunal is hereby condoned. The application for condonation of delay made by the appellant in the appeal preferred before the Tribunal hereby stands allowed. Consequently the appeal as well as the stay application stand restored to the file of the Tribunal, which shall now be decided on merits in accordance with law.