Star Battery Ltd. vs Asstt. Commr. C. Ex.

Soumitra Pal, J.—Affidavit of service filed in Court today be kept on record.

In this writ application the Petitioner, a private Limited Company within the meaning of the Companies Act, 1956, has challenged the order dated 19th April, 2010 dismissing the application for condonation of delay and consequently dismissing the stay petition and the appeal on several grounds.

It appears that being aggrieved by the order dated 31st March, 2008 passed by the Commissioner, Central Excise, Kolkata-IV, Commissionerate, the Respondent No. 2, the Petitioner was required to file an appeal before the Learned Customs, Excise and Service Tax Appellate Tribunal, East Zonal Bench, Kolkata. Incidentally, the Petitioner has two directors - S.N. Kejriwal and S.K. Kejriwal. At the point of time the appeal was required to be filed before the Tribunal, S.K. Kejriwal, one of the directors, was seriously ill. According to the Petitioner, although prompt action should have been taken for filing of the appeal against the order dated 31st March, 2008 within the statutory period of 60 days, that is, 18th May, 2008, the appeal was actually filed on 23rd January, 2009, along with an application for condonation of delay since there was a delay of 232 days. Subsequently, on 19th April, 2010 the appeal along with the applications praying for waiver of pre-deposit and the application for condonation of delay came up for hearing before the Tribunal. The Tribunal recalled its earlier order dated 6th October, 2009 and restored the appeal. Thereafter, the Tribunal proceeded to hear the application for condonation of delay. According to the Petitioner, though there was no mala fide intention in preferring the appeal beyond the prescribed period of time, the Tribunal, however, arbitrarily by quoting a particular paragraph from the application for the condonation of delay, dismissed the said application as well as the appeal. Submission is that the Tribunal without appreciating the background for which the delay was caused, abruptly dismissed the application for condonation of delay. It has been stated that the apparent reason which the Tribunal arrived at the hearing was that since the Petitioner had made an averment to the effect that it had many personnel to look after the various matters in the company and since only one of the two directors was keeping unwell, delay should not have been caused. According to the Petitioner, the Tribunal should not have quoted a few sentences from the application and relying thereon should not have dismissed the same. Submission is it is a normal feature in a corporate structure that although there are employees at different levels and there is division of labour, but at the same time it has to be kept in mind that important and major policy decisions affecting the company are usually taken by the persons who normally occupy very senior positions that is, who are usually the directors of the company. According to the Petitioner, in the instant case when the appeal was supposed to be filed, one of the directors S.K. Kejriwal was seriously ill and was bed ridden and S.N. Kejriwal, the other director and the brother of S.K. Kejriwal was completely engaged in looking after the treatment of his brother. Submission is though delay was sufficiently explained in the application, however, the Tribunal passed the order rejecting the said application relying only on paragraph 5.

Heard learned advocates for the parties. The first question is whether a writ petition is maintainable against an order of this nature passed by the learned Tribunal. Since I find that the issue in question is a question of fact and does not involve a substantial question of law u/s 35G of the Central Excise Act, 1944, the writ petition is maintainable.

So far as the merit of the writ petition is concerned, I find that the Petitioner had filed an application u/s 5 of the Limitation Act before the Tribunal. After hearing the learned advocates for the parties, the Tribunal had passed the impugned order, the relevant portion of which is as under:

4.1 We find that as per the provisions of Section 35B of the Central Excise Act, the Tribunal can condone the delay in filing the appeal, if it is satisfied that there was sufficient cause in presenting it within the normal period of limitation. The only contention of the Applicant is that one of the Directors was not keeping the good health during the period in question. The Application in para 5 of the Application stated as under:

The Applicant states that the company has two Directors being Mr. S.N. Kejriwal and Mr. S.K. Kejriwal. Although there are many personnel in the company but all the policy decisions taken by the Directors.

4.2 In view of the admitted position that the factory was running and one of the Directors was looking after all the affairs of the company during the period in question. Therefore, we find no merit in the COD Application. Accordingly, the same is dismissed. Consequently, the Stay Petition and the Appeal are dismissed.

It is evident that the Tribunal had only referred to and relied on paragraph 5 of the application while passing the impugned order dismissing the application for condonation of delay. The Tribunal had unfortunately ignored the other paragraphs of the said application, particularly, paragraphs 6 and 7 thereof, which are as under:

It is stated that the present application in connection to which appeal has been filed relates to the period when the show cause notice was issued on 10th of October 2007. At that time Mr. S.K. Kejriwal one of the directors of the company was bedridden. Ultimately cancer was detected and he is being treated for a disease which is remediless.

The other director of the company Mr. S.N. Kejriwal who is the brother of Mr. S.K. Kejriwal is virtually running from pillar to post with the hope that there may be some chance of any positive response. The Applicant annexes here with copies of the various medical prescriptions to highlight such turmoil which is going on.

It is evident from paragraphs 6 and 7 of the application that the delay in filing the appeal was caused due to the fact that S.N. Kejriwal the director looked after, S.K. Kejriwal his brother, who is the other director. Thus, in my view, the delay was sufficiently explained. It is evident, in those circumstances, appeal could not be filed in time. I find that the Tribunal did not look into this aspect of the matter. It is also to be noted that an Applicant does not gain by filing an appeal belatedly. Therefore, the order dated 19th April, 2010 passed by the Learned Tribunal is set aside and quashed. The writ petition is allowed. The Tribunal is directed to hear the application for condonation of delay afresh upon notice and shall pass a reasoned order after giving an opportunity of hearing to the parties.

No order as to costs.

Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.