Lathia Industrial Supplies Co. P. Ltd. and Others vs Commissioner (Appeal-I) and Another

Akil Kureshi, J.

The judgment of the court was delivered by

Heard learned counsel for the parties for final disposal of the petition. The petitioners have, inter alia, challenged an order-in-original passed by

the adjudicating authority on October 19, 2011 by which he directed the recovery of the Cenvat credit of Rs. 1,08,116 with interest and imposed

penalty of Rs. 25,000 under the Cenvat Credit Rules, 2004. Such order was challenged before the Commissioner (Appeals). The Commissioner

(Appeals) however, dismissed such appeal on the ground of delay. He was of the opinion and rightly so that the appeal was presented beyond the

maximum condonable period prescribed under the Central Excise Act. The petitioners therefore, filed this petition and also questioned the order of

the Commissioner.

At the time of oral arguments before us the learned counsel Shri Devan Parikh for the petitioners made it clear that he does not challenge the

legality of the order of the Appellate Commissioner but submitted that the adjudicating authority''s order requires interference. He relied on the

averments made in the petition particularly, those contained in the amendment which was granted by us on December 19, 2012 to submit that the

petitioners had shown sufficient cause for not being able to prefer the appeal in time. Apart from other reasons, the counsel submitted that the

papers were entrusted to the counsel for filing the proceedings. There was reshuffling of the tasks in the office. The learned advocate who was in-

charge of this task had left the organisation and that therefore, it was not noticed that the appeal was not filed promptly. On the merits the counsel

Submitted that the issue is covered in favour of the petitioner by virtue of the decision of the Tribunal in the case of Lathia Industries Suppliers Co.

P. Ltd. v. CCE (dated October 20, 2011). In that view of the matter, he submitted that great hardship would be caused to the petitioners, if the

issue is not permitted to be raised before any court.

On the other hand, the learned counsel Shri Darshan Parikh on behalf of the Department opposed the petition contending that the Commissioner

had rightly rejected the petitioners'' appeal since the petitioner did not prefer such appeal within the prescribed period under limitation as also

within the time that the Commissioner could condone. He further submitted that question whether the issue is covered by the decision of the

Tribunal in the case of Lathia Industries Suppliers (dated October 20, 2011) needs to be examined. In short, he prayed that the petition be

dismissed.

Having thus heard learned counsel for the parties, in the facts of the case, we are inclined to put the matter back at the stage of adjudicating

authority. We notice that there has been some delay in the petitioners approaching the Appellate Commissioner and obviously the Commissioner

could not have ignored the statutory limit beyond which he could have condoned the delay. Nevertheless, as held by the Division Bench of this

court in the case of D.R. Industries v. Union of India reported in [2008] 3 GLH 662, such a situation would not prevent the High Court in

appropriate case to examine the validity of the order-in-original itself. This is however, hedged by two requirements. One that delay is otherwise

well explained and the court finds that non-consideration of the issues would result in gross injustice. The court observed as under:

As regards the contention that there may be extraordinary cases where the assessees may not be in a position to challenge the order of the

adjudicating authority before the Commissioner (Appeals) within a period of 90 days from the date of communication of the order, we are of the

view that in such extraordinary cases where an assessee can show extraordinary circumstances explaining the delay and also gross injustice done

by the adjudicating authority, the assessee may invoke the writ jurisdiction of this court. Hence, in cases where the assessees have suffered gross

injustice and they could not file appeals before the Commissioner (Appeals) within a period of 90 days from the date of communication of the

order-in-original on account of circumstances beyond their control, such assessees can invoke the powers of this court under article 226 of the

Constitution but, of course, not as a matter of right.

In the present case, we record that the delay was sufficiently explained. We are also prima facie of the opinion that the Tribunal''s decision in the

case of Lathia Industries Suppliers (dated October 20, 2011), does touch on the aspect of the matter. However, this shall have to be verified by

the adjudicating authority with the assistance of the petitioner.

In that view of the matter the impugned order dated October 19, 2011 passed by the adjudicating authority is set aside. The proceedings are

placed back to the stage of the adjudicating authority for fresh consideration and disposal in accordance with law after granting hearing to the

petitioner. We may clarify that on the question of availment of Cenvat credit involved in this petition, we have not expressed any final opinion. The

petition is disposed of accordingly.