The Commissioner of Customs (Gen) vs Tahkker Shipping Pvt. Ltd.

V.C. Daga, J.—This appeal was admitted by an order dated 6th April, 2009 to consider the following substantial question of law:

Whether the CESTAT has discretionary power u/s 129A(5) of the Customs Act, 1962 to condone the delay caused in filing the appeal u/s 129D(3) [wrongly mentioned as 129A(3)] of the said Act, when there was sufficient cause available to appellant for not filing it within the prescribed period before the Appellate Authority?

FACTUAL BACKDROP

The factual backdrop giving rise to the present question of law is that the Respondent herein being Custom House Agent ("CHA" for short) has been granted a regular CHA Licence to transact business in Mumbai Customs House in accordance with the Rules and Regulations stipulated under the CHA Licencing Regulations, 2004 ("the Regulations" for short).

On the basis of specific information received, a container was intercepted by M & P Wing of Commissionerate of Customs (Preventive), Mumbai. It was found to contain assorted electrical and electronic goods of foreign origin. The said goods were imported by M/s. Qureshi International. The cargo was cleared from Nhava Sheva. The clearance of the goods was handled by the Respondent

On physical verification, the value of the seized cargo was estimated at Rs. 77,10,000/- as per the value prevailing in the local market as against the declared value of Rs. 10,03,690/-. The importer Shri Riyazuddin Qureshi being untraceable could not be interrogated on second occasion.

The statement of Vijay Thakkar, Proprietor of the CHA firm was recorded u/s 108 of the Customs Act, 1962, wherein he accepted the fact that he had attended the said import clearance and also introduced Riyazuddin Qureshi to the suppliers and bankers for financial assistance. The Bill of Entry for the clearance of the subject goods had been filed by him without proper description and correct valuation of the subject goods. He admitted that he failed to inform the Customs Officer about the said goods, despite having attended the examination of 5% of the goods prior to the clearance. Further, it was revealed that, the CHA firm on earlier occasions had cleared two consignments of the same importer without declaring any Brand. Mr. Vijay Thakkar was earlier detained under Cofeposa for indulging in smuggling activities and it was suspected that in the instant case, the CHA was the actual importer of the subject goods and that he was using Mr. Riyazuddin Qureshi as a mere front.

On the basis of the aforesaid report, the CHA licence held by the Respondent was placed under suspension vide order dated 31st January, 2001, pending inquiry under regulation 23 of the Regulations. The suspension was later on confirmed by the then Commissioner of Customs (G) vide order No. 30/2001 dated 3rd August, 2001. Thereafter, the CHA filed an appeal with the CESTAT against the aforesaid order. The CESTAT, vide its order dated 18th December, 2001 set aside the order dated 3rd August, 2001. Accordingly, as per the directions of Cestat, the suspension of the CHA licence of the Respondent was revoked and the subject licence was restored on 28th January, 2001 without prejudice to any other action that can be taken on the basis of investigation/inquiry pending against them. Inquiry was initiated under Regulation 23 of the Regulations. On the basis of investigation, five charges were framed against the Respondent CHA under various Clauses of the Regulations.

The Commissioner of Customs (General), based on the inquiry report of the Inquiry Officer and after hearing both the sides, concluded that the contention of the CHA as regards lacunae pointed out in the conduct of inquiry proceedings were not without basis and in the absence of specific evidence except the initial statements of the importer against the (CHA) Respondent, the responsibilities and financial interest normally associated with an importer cannot be shifted on the CHA-Respondent. The Commissioner, thus, dropped the proceedings against the CHA Respondent vide his order-in-original dated 21st July, 2004 by rejecting the findings of the Inquiry Officer.

The aforesaid Order-in-original was reviewed by the Committee of Chief Commissioner of Customs u/s 129D of the Customs Act, 1962 vide review order dated 10th June, 2005 and directions were issued to the Commissioner of Customs (General) to file an appeal against the Order-in-original before the CESTAT, Mumbai Bench at Mumbai. According to the appellant, the said review order inadvertently remained to be dispatched from the office of the Commissioner of Customs (General) to the concerned department. It ultimately, resulted in filing an appeal delayed by 10 days before CESTAT. The Revenue preferred an appeal before the CESTAT along with an application for condonation of delay. The CESTAT rejected the application for condonation of delay relying on the judgment of the larger Bench of the Tribunal in the case of 2000 (120) ELT 201 holding the absence of power to condone delay in favour of the Tribunal. In the result, the appeal preferred by Revenue was dismissed by an order dated 28th November, 2005.

Being aggrieved by the aforesaid order, the appellate jurisdiction of this Court is invoked by the Revenue-appellant u/s 130A of the Customs Act, 1962. The appeal was admitted to consider the question of law extracted in the opening part of this judgment.

SUBMISSIONS

The Revenue was initially represented by a junior Advocate, consequently, Mr. Sridharan was appointed as Amicus Curie to assist this Court. Later on, considering the complexity of the issues involved, the Revenue chose to brief Mr. Sethna, Senior Advocate. Ultimately, this Court had the benefit of hearing Mr. Sethna for Revenue and Mr. Sridharan, as Amicus Curie. Mr. Nankani, learned Counsel represented the Respondents. The appeal was heard in extenso.

At the outset, Mr. Nankani appearing on behalf of the Respondent raised a preliminary objection and submitted that the appeal is not maintainable because the impugned order of the Tribunal is based on the decision of the Larger Bench of the Tribunal in 2000 (120) ELT 201 He contended that this decision of the Larger Bench of the Tribunal has not been challenged in appeal by the Revenue. The Department has, therefore, accepted the decision of the larger Bench and the said judgment holds the field as of date. A number of decisions of the Tribunal following the larger Bench have also attained finality. No special reasons have been disclosed, either in an affidavit or otherwise, as to why the present appeal is filed when the impugned order follows the decision of the larger Bench. It is, therefore, submitted that a precedent which has been accepted by the Appellant-Revenue should not be disturbed and the appeal be dismissed on this short count alone.

Mr. Nankani further submits that, it is true that the Apex Court has held in Col. (Retd.) B.J. Akkara Vs. The Govt. of India and Others, that merely because an order has not been challenged in appeal in any one case, does not mean that the Government cannot file an appeal in another case involving the same issue. The Apex Court, however, further held that the Government is required to show as to why the first order was accepted and no appeal was filed against the same when no reasons in this behalf are disclosed, as such the appeal is liable to be dismissed.

In reply, Mr. Sethna, learned Senior Counsel submits that the Judgment of the Tribunal in the case of AZO Dye Chemical (supra) is based on the parallel provision u/s 35E of the Central Excise Act. He, while admitting that the provision of Section 35E of the Central Excise Act is identical to the provisions of Section 129D of the Customs Act, went on to urge that no appeal is provided against the order of the larger Bench and that this cannot be a ground to non-suit the Revenue.

Mr. Sethna urged that, reading of Sub-section (4) of Section 129D itself shows that the said Sub-section mandates application of the provisions relating to appeals in the Act to the application referred therein. In particular, the Section itself makes a specific reference to the application, inter-alia, of Sub-section (4) of Section 129A of the Customs Act. He, thus, submits that though power to condone delay has been put under a separate Sub-section of the main section, undoubtedly, it is an inherent part of the provision of Sub- Section (4). In fact, all other provisions dealing with �limitation� and �condonation of delay� under the "Appeal" Chapter of the Act, have followed a pattern of stating the period of limitation and providing for condonation of delay. Evidently, the Legislature did not intend to give any different treatment only so far as the provisions of Sub-section (4) is concerned. He submits that the submission is based upon certain sound principles of interpretation.

Mr. Sethna submits that if the provision of Sub-sections (4) of Section 129D is interpreted in the manner suggested, it would be clear that the specific reference to apply the provisions of Sub-section (4) of Section 129A clearly mandates the application of the Sub-section(5) thereof which deals with the condonation provision. In support of this submission, Mr. Sethna pressed into service various principles of interpretation of statutes.

Mr. Sethna urged that Maxwell, the renowned authority on �interpretation� has dealt with certain decisive principles of interpretation, wherein the departure from literal construction is not only permitted but found to be a mandatory requirement for carrying out the Legislative intent. The first such principle relied upon by Mr. Sethna is the one which is dealt with under Chapter II, wherein, the renowned author under sub heading 4, dealing with "Statutory Aspect", has stated as under:

It has been said that one of the safest guides to the construction of sweeping general words which are hard to apply in their full literal sense is to examine other words like import in the same instrument and to see what limitation must be imposed on them....

Mr. Sethna submitted that in the present context, if one without going too far, restricted the interpretation only to the provisions relating to Limitation Period and Condonation Period under the Chapter of "Appeals" (Chapter XV) the same deals with Appeals to (i) the Commissioner of Appeal u/s 128, (ii) the Appellate Tribunal u/s 129A, (iii) the Revision Application to Central Government u/s 129DD and (iv) after subsequent amendment an Appeal to the High Court u/s 130 or (v) Reference to the High Court u/s 130A. All these provisions of the Chapter, have included the benefit of "condonation of the limitation period". Even before the amendments to Section 130 and Section 130A, the provisions applicable to all the Appeals did contain such provisions. He submits that the absence of explicit condonation provision, prior to amendment in Sections 130 and 130A may be due to the facts that as these appeals/references were before a High Court, possibly, therefore, the legislature refrained from inserting such explicit condonation provisions. Therefore, an unnatural or highly technical interpretation only with respect to Section 129D, disregarding the provisions in all other sections under the Chapter relating to "Appeal" would be contrary to the intention of the Legislature.

Mr. Sethna submits that a narrow interpretation as given by the Larger Bench of the Tribunal could never have been the intention of the Legislature when the provisions in respect of all other Appeals under the said Chapter are benefited by the �condonation� provision. In this context, our attention was invited to yet another Principle of Construction, which says that "the interpretation which is most agreeable to justice and reasons should always be preferred".

Mr. Sethna urged that this Court needs to adopt a beneficial construction to the provisions with which we are dealing. According to him, the most reasonable interpretation in the present context which would further the ends of justice is: not to deprive any party to an Application made u/s 129D the benefit of condonation of delay, particularly, when the beneficial interpretation leads to a harmonious construction of the provisions of Sub-section (4) and (5) of Section 129A of the Act.

Mr. Sethna submits that Sub-section (4) of Section 129A deals with the right of a party to file cross objections after receipt of the Appeal. Provisions of Section 129A(4) read with (5) enlarges the period of limitation to 45 days for filing cross objections. As Sub-section (4) of 129A is specifically to be incorporated as a part of Section 129D (and therefore also Sub-section (5)) this results in condonation limit of 45 days to file cross objections permissible in the proceedings commenced u/s 129D. Therefore it would be highly discriminatory to deny such condonation benefit only to the party which files an application in the nature of an appeal. That in fact, Section 129A confers the condonation benefit to both the sides. He submits that if this is the positition in respect of an appeal filed under 129A, there is absolutely no justifiable reason why in the case of an appeal u/s 129D a narrow interpretation should give such benefit only to one side. This would be highly discriminatory, without any justification and reason. This approach may also lead to violation of the provisions of Article 14 of the Constitution of India.

It is the submission of Mr. Sethna, that such aforesaid discrimination could never be the legislative intent. The absence of any legal basis for such discrimination is further demonstrated by the fact that (a) the Legislature has permitted condonation benefit to the appeal preferred by the Department u/s 129(2) & (3). Thus, an appeal to the Appellate Tribunal filed by the Department against the order of Appellate Commissioner/Commissioner (Appeals) on the direction of the Committee of Commissioners can get the condonation benefit; There is no reason as to why an identical benefit to an appeal filed in the Appellate Tribunal against the orders of the Commissioner as an adjudicating authority on the direction of a similar Committee of Chief Commissioners u/s 129D should be deprived of the identical condonation benefit. In his submission an interpretation which leads to an anomalous situation and absurdity finds no basis under the statutory principles of interpretation

Mr. Sethna in support of his submission submits that purposive interpretation is one of the rules of interpretation, which cannot be overlooked. In fact, it is an extremely important guide in matters of interpretation. He placed reliance upon recent decisions of the Apex Court in Standard Chartered Bank and Others Vs. Directorate of Enforcement and Others, second in New India Assurance Company Ltd. Vs. Nusli Neville Wadia and Another, wherein, inter alia, the Court held that a literal construction which leads to an anomalous situation is not contemplated in law. That the provisions of the Acts and the Rules are thus required to be construed keeping in mind the principles envisaged under Article 14 of the Constitution. With a view to give effect thereto, recourse should be to the doctrine of purposive construction. He also placed reliance on the judgment in the case of UCO Bank and Another Vs. Rajinder Lal Capoor, wherein, the Court reiterated that: "It is now a well settled principle of interpretation of Statute that the court must give effect to the purpose and object of the Act".

On the above backdrop, Mr. Sethna finally urged that the highly technical and restrictive construction of Section 129D by denying provision of condonation laid down by the larger Bench of the Tribunal in the case of Azo Dychem (supra) may be held to be bad in law and an appropriate construction to the provisions of Section 129D, inter alia, in light of Section 129A of the Customs Act be given by this Court.

Mr. Nankani submits that, the application under Sub-section (4) of Section 129D was filed pursuant to an order (also referred to as the Review order) made under Sub-section (1) or Sub-section (2) thereof, as the case may be. This is evident from a plain reading of Sub-section (4) of Section 129D, which is divided into the following 2 parts:

(a) Where in pursuance of an order under Sub-section (1) or Sub-section (2), the adjudicating authority or any officer of customs authorized in this behalf by the Commissioner of Customs, makes an application to the Appellate Tribunal or the Commissioner (Appeals) within a period of 3 months from the date of communication of the order under Sub-section (1) or Sub-section (2) ... ",

(b) .... such application shall be heard by the Appellate Tribunal or the Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of Sub-section (4) of Section 129A shall, so far as may apply to such application.

According to Mr. Nankani, the first part is a mandate to the adjudicating authority or the authorized officer of the Customs to file the application within the specified time i.e. 3 months from the date of communication of the order under Sub-section (1) or Sub-section (2) of Section 129D, as the case may be, and, the second part provides for the procedure to be followed for hearing the application.

Mr. Nankani, based on the above dis section, submitted that, any violation of the mandate, in view of the legislative provision is a matter between the authority making the review order under Sub-section (1) or Sub-section (2) of Section 129D, on the one hand, and the adjudicating authority or the authorized officer of Customs, who are directed to make the application, on the other. This is not a matter wherein the Tribunal is concerned and therefore, the question of the Tribunal�s powers to condone delay does not arise at all. The relationship between the Revenue Authority under Sub-section (1) or Sub-section (2) of Section 129D, as the case may be and the adjudicating authority or the authorized Customs Officer to whom the direction to file the application is made; is that of a superior (higher) authority and subordinate authority. The Tribunal cannot and does not interfere at this stage because the Tribunal assumes jurisdiction only after the application is filed under Sub-section (4) of Section 129D. If the application is filed within the stipulated time, the Tribunal shall take cognizance thereof and hear the same as if the application were an appeal but on the other hand, when the application is not filed within the stipulated period of 3 months, the Tribunal cannot entertain such an application.

Mr. Nankani further contends that the words "as if such application were an appeal" clearly constitute a legal fiction but such legal fiction has to be given a limited meaning which cannot be extended beyond the purpose for which the legal fiction was created. He also relied upon the judgment of the Apex Court in the matter of UCO Bank and Anr. v. Rajinder Lal Capoor (supra). It is submitted that the legal fiction is limited only to the hearing of the application as if it were an appeal. This is because the words "as if" are proceeded by the words" such application shall be heard by the appellate Tribunal or the Commissioner (Appeals) as the case may be .. ". It, therefore, follows that the legal fiction has been introduced for the limited purpose of hearing the application filed under Sub-section (4) of Section 129D as if it were an appeal. This means that the provisions of Section 129B and Section 129C shall also apply to applications filed under Sub-section (4) of Section 129D.

In the submission of Mr. Nankani, the use of the words and phrases"... such application shall be heard by the Appellate Tribunal...as if such application were an appeal", leaves no manner of doubt that it is only the procedure in relation to the hearing of appeals and orders passed therein, that have been incorporated by reference by the deeming fiction. So also, the legal fiction shall relate to the right of the parties to carry the Tribunal�s decision or order passed on such an application, in appeal either to the Hon''ble Supreme Court or to any Hon''ble High Court, as the case may be. He, thus, submits that the words and phrases "...and the provisions of this Act regarding appeals..." must be given a meaning in the context of the said provisions relating to the procedure before the Tribunal and further appeals, if any, and nothing more.

Mr. Nankani further submits that it is true that Sub-section (4) of Section 129D also contains the words "...the provisions of this Act regarding appeals, including the provisions of Sub-section (4) of Section 129A shall so far as may be apply to such application", it means only those provisions relating to appeals provided in Section 129B and Section 129C relating to hearing of an appeal by the Tribunal are alone extended to an application made under Sub-section (4) of Section 129D.

Mr. Nankani further submits that Sub-section (4) to Section 129D refers to Sub-section (4) to Section 129A, specifically, for the reason that the assessee, on being put to notice of an application u/s 129D(4) must be given an opportunity to file a memorandum of cross-objections, in the event the assessee has not already filed an appeal from the order in question. Such a right to file a memorandum of cross objections must be conferred by statute, and in the absence of Sub-section (4) of Section 129A, no such right would be available to the assessee.

Mr. Nankani, turning to the scheme of the Act in relation to appeals to the Tribunal submits that Section 129A provides for an assessee to challenge an order passed by a Commissioner or a Commissioner (Appeals) and the Revenue to challenge an order passed by the Commissioner (Appeals) to the Tribunal. Sub-section (3) provides for the appeal to be filed within 3 months of the communication of the order under challenge. Sub-section (4) then provides for the non-appellant to file a memorandum of cross-objections within 45 days of service of notice of the appeal upon it. Sub-section (5) vests the Tribunal with the power to condone the delay in either the filing of the appeal under Sub-section (3) or the memorandum of cross-objections under Sub-Clause (4).

Section 129D gives the Revenue the right to challenge a decision or order made by the Commissioner of Customs. At the relevant time, Sub-section (3) of the said provision provided for a period of 12 months from the date of communication of the order, for the Committee of Chief Commissioners to make an order authorizing the adjudicating authority or any other officer to prefer an application to the Tribunal for determining such points as may arise from the Commissioner�s order. Sub-section (4) in turn provided a time of 3 months from the date of the order passed under Sub-section (3), for the making of the application to the Tribunal. As against an assessee who got 3 months to prefer an appeal to the Tribunal and the Revenue who also got 3 months to prefer an appeal in case of orders passed by the Commissioner (Appeals), the Revenue was granted a total of 15 months for preferring an application u/s 129D(4). It was not intended by the legislature to give the Revenue any further accommodation, bearing in mind that if the Revenue were given any further accommodation, it would result in uncertainty, since the assessee could face an application several years after the order being passed by the Commissioner, which is antithetical to the administration of justice.

Mr. Nankani further submits that the time period of 12 months under Sub-section (3) of Section 129D was reduced to 3 months by the Finance Act, 2007, with a view to expedite filing of appeal by the Central Government and to bring the appeal period allowed to the Government at par with the period allowed to the assessee.

Mr. Nankani submits that, under the law in force at the relevant time, the Revenue was in an unduly advantageous position in relation to the time permitted to it to challenge an order passed by the Commissioner before the Tribunal, and by the Finance Act, 2007 that undue advantage was taken away. The plain language of Sub-Section (4) of Section 129D, however, remained unchanged and the Commissioner was duty bound to make the application to the Tribunal within 1 year from the date of the order passed under Sub-section (3) to Section 129D.

In the submission of Mr. Nankani, it is well settled that the power to condone delay must be specifically conferred on the authority, and cannot be inferred, as held by the Hon''ble Supreme Court in the case of Commissioner of Customs and Central Excise v. Hongo India (P) Ltd. In relation to Section 129D(4), inasmuch as no power to condone the delay in making the application is provided, the same cannot be inferred either by the use of words or phrases "...as if such application were an appeal...and the provisions of this Act regarding appeals... shall so, far as may be apply to such application" or otherwise.

Mr. Nankani submits that, it is also well settled that the use of the words and phrases "...so far as may be..." give the preceding words and phrases a contextual relevance and reference. In Sub-section (4) to Section 129D, if it were the legislative intent to incorporate all provisions of Section 129A, the said words and phrases need not have been used. The legislature does not use superfluous words, and meaning must be ascribed to the said words and phrases, which, as afore-said, restricts the application of the provisions in relation to appeals only to those that relate to the procedure for hearing and passing orders in an appeal before the Tribunal and further appeals therefrom, and by specific reference, to a right to the assessee to file a memorandum of cross-objections. The legislature never intended to incorporate Sub-section (5) of Section 129A or any analogous provision into Section 129D(4). If the arguments canvassed by the Revenue were to be accepted it would amount to reading words into Sub-section (4) of Section 129D, and such a course of action is impermissible. On the other hand, Section 129A is a substantive provision which relates to right to appeal conferred on a person aggrieved by an order of Adjudication Authority and on the Commissioner of Customs, who is aggrieved by the order passed by the Commissioner (Appeals) u/s 128A of the Act. Sub-section (4) of Section 129A deals with the right to file cross objections at the instance of the party against whom appeal has been preferred.

According to Mr. Nankani, the reason for incorporating by reference Sub-section (4) of Section 129A is because otherwise there is no provision in Section 128 or Section 128A of the Act to file cross objections when an appeal is filed by an aggrieved person before the Commissioner (Appeals) thereunder. Consequently, when an application under Sub-section (4) of Section 129D is filed before the Commissioner (Appeals), the assessee also now has the right to file cross objections on account of incorporation by reference to Sub-section (4) of Section 129A of the Act in Sub-section (4) of Section 129D of the Act.

The word "including" appearing in Sub-section (4) of Section 129D does not mean that all the provisions of Section 129A, including Sub-section (5) thereof are applicable. The reference in Sub-section (4) of Section 129D is limited to Sub-section (4) of Section 129A and therefore, other provisions of Section 129A including Sub-section (5) thereof, which confers the power of condonation of delay to the Tribunal does not arise at all. The word "including" is not always expansive and can also be restrictive in nature. (See The South Gujarat Roofing Tiles Manufacturers Association and Another Vs. The State of Gujarat and Another,

Also the phrase "so far as may be" appearing in Sub-section (4) of Section 129D has limited effect. This phrase means that to the extent possible the provision regarding hearing of appeals shall apply also to application filed under Sub-section (4) of Section 129D. (See Dr Partap Singh and Another Vs. Director of Enforcement, Foreign Exchange Regulation Act and Others,

In the circumstances, it is submitted that Sub-section (5) of Section 129A of the Act does not apply to the applications made under Sub-section (4) of Section 129D of the Act and hence the Tribunal does not have the powers to condone the delay in filing an application beyond the period of 3 months from the date of communication of the order under Sub-section (1) or Sub-section (2), as the case may be.

Mr. Nankani submits that it is pertinent to note that the Appellant Revenue itself understands the mandate of Section 129D in the following words, as published in the Departmental Officers Procedural Manual Volume III:

...It should be noted that there is no provision for condonation of any delay in the making of either the order under Sub-section (1) or the application under Sub-section (4).

Article 7.11.3 (b) at Page 219 He, thus, submits that the present appeal is liable to be dismissed with costs to the Respondent

Mr. Sridharan, learned Counsel appearing as Amicus Curie, submits that when an assessee files an appeal with delay, the same can be condoned by the Tribunal without time limit. Similarly, unlimited delay can be condoned when the appeal is filed by the Commissioner against the order of the commissioner (Appeals) u/s 129A(2). However, delay in filing the application before the Tribunal beyond the time limit mentioned in Section 129D(4) cannot be condoned. In his submission, different periods of limitation can be prescribed for the Government and non-Government litigant, and the same be will not be violative of Article 14. He placed reliance on the judgment of the Apex Court in the case of Nav Rattanmal v. State of Rajasthan 1961 SC 1704.

Mr. Sridharan took us through the text of Section 129D(4) and submits that once an application is filed within three months, then the rest of the Section is triggered and comes into play and such an application can then be heard by the Tribunal. If such an application is not filed within three months, it cannot be called as "such" application as referred to in Section 129D(4) and consequently rest of the provisions of Section 129D(4) would not be attracted. He further submits that the second part of Section 129D(4) only provides the procedure to be followed for hearing of the application. This includes in its fold further appeals to the High Court, Supreme Court etc. after the final order is passed by the appellate authority on the application filed by the Revenue u/s 129D. He further submits that u/s 129A(5) one cannot apply for condonation of delay in the application u/s 129D(4). According to him, u/s 129A(3) appeal has to be filed within three months from the date of communication of the order. u/s 129A(4), cross objections has to be filed within 45 days from the date of receipt of the hearing notice of the appeal. He further submits that Section 129A(5) states that the delay may be condoned when the appeal is not filed within the period referred to in Sub-section (3). This period of three months runs from the date of communication of the order appealed against. The expression "within that period" employed in Section 129A(5) refers to three months from the date of communication of the order appealed against. In his submission, in the context of Section 129D(4), time of three months is from the communication of date of the order of the reviewing authority namely Central Board u/s 129D(1) or the Collector of Customs u/s 129D(2). Three months mentioned in Section 129D(4) is not the date of communication of the order sought to be appealed against. He, therefore, submits that even if the application u/s 129D(4) is to be fitted u/s 129A(5), the very language of Section 129A(5) does not permit such an exercise. Based on the scheme of the section, Mr. Sridharan submits that the Assessee is given only three months to file an appeal with the Tribunal. Even the Revenue is given three months time to file an appeal in the Tribunal against the order of the Commissioner (Appeals). The time limit of two years given to the Board for consideration was a very long period which was subsequently reduced to one year after the Finance Act, 1984, this reduction in period is intrinsic evidence that the Act does not contemplate grant of further extension of time.

Mr. Sridharan, further submits that the duty to be performed by the Collector u/s 129D(4) is purely ministerial and procedural. The Board has to arrive at its satisfaction and record that the order of the adjudicating authority is not legal and proper. The order of the Board u/s 129D(1), has also to specify and point out the points arising out of the decision of the adjudicating authority on which application should be filed before the Tribunal. Therefore, under the first leg of Section 129D(4), the Collector, who is to file an appeal is not expected to apply his mind to the legality of the order to be challenged or apply his mind to the ground of appeal etc. All these are done u/s 129D(1) by the Board. In his submission, surely for such a ministerial act of practically forwarding the papers received from the board to the Tribunal, three months time is adequate. Hence, no further power to extend time to file appeal is provided.

Before adjudicating upon the issues raised, it would be useful to refer to some of the judicial pronouncements and opinion of the Tribunal, pressed into service by the Counsel appearing for either side to substantiate their respective stands.

The decision of the Supreme Court in the case of Collector of Central Excise, Madras Vs. M.M. Rubber and Co., Tamil Nadu, was rendered construing the relative scope of Section 35A, 35B and 35E of the Central Excise and Salt Act, 1944 which was para-materia with Section 128, 128A(5), 129D(1), 129D(2) and 129D(3) of the Customs Act. The Apex Court, in this case, essentially considered the question of commencement of limitation for filing an appeal or revision u/s 35E of the Central Excise and Salt Act,1944. The Apex Court had no occasion to consider and deal with the issue involved herein with regard to the power of the Tribunal to condone delay in the event application under Sub-section (4) of Section 129D or for that purpose cross-objection under that Sub- section, similar to Sub-section (4) of Section 35E of the Central Excise Act, 1944, is filed beyond the period of limitation.

The second judgment relied upon is from the Apex Court in the case of Commissioner of Customs and Central Excise v. Hongo India Pvt. Ltd. (2009) 5 SCC 791 wherein power to condone delay in filing Reference was an issue for consideration. The third judgment relied upon is in the case of The Commissioner of Income Tax, Bombay Vs. Ranchhoddas Karsondas, Bombay, wherein the Apex Court observed that all laws of limitation lead to some inconvenience and hard cases. The remedy is for the Legislature to amend the law suitably. The Courts should administer the laws as they find them, and they are seldom required to be astute to defeat the law of limitation.

The next judgment relied upon is of the Tribunal in the case of 2000 (120) ELT 201 wherein the question involved in the present appeal was considered by the Tribunal while interpreting the provisions of Section 35E of the Central Excise Act, 1944, which is paramateria with Section 129D of the Act, wherein the question raised in this appeal is for consideration.

On careful analysis and perusal of the said judgment of the Tribunal, it is clear that it is mainly based on the interpretation of the words "such application" used in Sub-section (4) of Section 129D. The Tribunal held that "such application" means an application filed by the Adjudicating Authority within three months from the date of communication of the order passed by the Tribunal. If such an application happened to be filed beyond the period of three months, it cannot be admitted by the Tribunal for want of power to condone delay. Such an interpretation, in our view needs to be re-tested on the text of the provisions engrafted in Chapter XV in general and Sub-section (4) of Section 129D of the Act in particular applying settled principles of interpretation of statute.

Parties to the appeal have also pressed into service few more judgments relating to the well settled principles of interpretation of statute, reference to which is not necessary since those principles are well recognised.

STATUTORY PROVISIONS:

The relevant provisions of the Act are set out hereinafter.

Section 128 of the Act provides for appeal by the person aggrieved by any decision or order passed under this Act by an Officer of Custom lower in rank than a Collector of Customs and that such an appeal is required to be filed "within three months from the date of communication to him of such decision or order". Sub-section (5) of Section 128A requires that on disposal of the appeal, the Collector (appeals) shall communicate the order passed by him to the appellant, the Adjudicating Authority and the Commissioner of Customs. Section 129A provides for right of appeal to any person aggrieved by, amongst other orders, (a) a decision or order passed by the Collector of Customs as an adjudicating authority (b) an order passed by the Collector (Appeals) u/s 128A. Such an appeal will have to be filed within three months from the date on which the order sought to be appealed against is communicated to the Collector of Customs or as the case may be, the other party preferring the appeal. "The Appellate Tribunal is also required to send a copy of the order passed in the appeal to the Commissioner of Customs and the other parties to the appeal. Section 129D(1) authorises the Board, of its own motion, to call for and examine the record of any proceeding in which a Collector of Customs as an adjudicating authority has passed any decision or order under this Act for the purpose of satisfying itself as to the legality or propriety of any such decision or order and may, by order, direct such Collector or any other Commissioner to apply to the Appellate Tribunal or as the case may be the Customs and Excise Revenue Appellate Tribunal established u/s 3 of the Customs and Excise Revenue Appellate Tribunal Act, 1986 for the determination of such points arising out of the decision or order as may be specified by the Board in its order." Sub-section (2) of Section 129D which is also relevant for consideration, is reproduced hereinbelow:

It may be seen that the direction to file an appeal under these two Sub-sections by the Board and the Collector, as the case may be, is to the very adjudicating authority who would otherwise be bound by his own order and not expected to be aggrieved by the same. When an appeal is filed on such directions, the appellant will be the adjudicating authority himself and not the authority who gave the direction.

Sub-section (3) of Section 129D of the Act which deals with the limitation for exercise of the powers under Sub-section (1) and (2) of the Act and which is the relevant provision for consideration in this appeal reads as follows:

129D(3) - No order shall be made under Sub-section (1) or Sub-section (2) after the expiry of one year from the date of the decision or order of the adjudicating authority.

At this stage, we may state that Sub- Section (4) of Section 129D provides that the Adjudicating Authority shall file an application before the Tribunal in pursuance of the order made under Sub-section (1) or (2) "within a period of three months from the date of communication of the order under Sub-section (1) and (2) to the Adjudicating Authority. The relevant provision for consideration in the appeal reads as under:

129D(4): Where in pursuance of an order under Sub-section (1) or Sub- section (2), the adjudicating or any officer of customs authorised in this behalf by the Collector of Customs makes an application to the Appellate Tribunal within a period of three months from the date of communication of the order under Sub-section(1) or Sub- Section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the Collector (Appeals) as the case may be, as if such applications were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of Sub-section (4) of Section 129A shall, so far as may be, apply to such application.

(Emphasis supplied)

Reading of the aforesaid Sub-section provides for applications to be treated if it were an appeal to be governed by sub Clause (4) of Section 129D. The entire issue determined hereinbelow revolves around interpretation of Clause (4) of Section 129D extracted hereinabove.

THE ISSUE

The aforesaid rival submissions give rise to the sole issue with regard to the power of the Tribunal to condone delay in the event of an application filed u/s 129D(4) of the Customs Act.

CONSIDERATION

Having heard three different views canvassed by the learned Counsel appearing for the parties and having examined the statutory provisions holding the field at the relevant time as also the material facts in the light of the judicial pronouncement placed before us, we are of the view that the submissions on behalf of the appellant/Revenue deserve acceptance for the reasons recorded hereinafter.

Let us turn to the text of Sub- Section (4) of Section 129D, bearing in mind well recognised rules of construction of statute. The first elementary rule of construction is that, the words used in the Section must be understood in their plain grammatical sense. Keeping in mind this principle, reading Sub-section (4), we get the words "such application". It is no doubt, it means an application filed by the adjudicating authority within a period of three months from the date of communication of the order by the Board. But this meaning assigned to the words "such application" alone cannot be a deciding factor. In construing the said Sub-section, the entire Sub-section needs to be read in its proper perspective. Few isolated words cannot determine the meaning of the section. If we further read Sub-section (4) we get the words "provisions of this Act regarding appeal". What do you mean by these words? The dictionary meaning of the word "regarding" is: "concerning". So far as the applicability of the provisions to the application filed under Sub-section (4) of Section 129D is concerned, the provisions of the Act concerning/regarding appeals are made applicable. The provision of Sub-section (5) of Section 129A is a provision concerning appeal. It provides for the power to condone delay. If this be so, this provision of Sub-section (5) of Section 129A will be very much applicable to the remedy provided under Sub-section (4) of Section 129D of the Act. Sub-section (4) of Section 129A is not only made applicable to the application but it is also made applicable to the cross objections filed. In the absence of specific inclusion of Section (4) of Section 129A, no assessee or noticee, who was aggrieved by part of the order passed by the Adjudicating Authority could file cross objections. Right of appeal or cross objections is required to be conferred by the statute. Since the right flows from the statute, it is a statutory right and not a common law right. In absence of specific conferment of such right, no noticee could file cross objections against the original order passed in an application filed by the adjudicating authority pursuant to the directions given by the Board, before the Appellate Tribunal. For that purpose the provision contained in Sub-section (4) of Section 129A of the Act needs to be read into Sub-section (4) of Section 129D of the Act. The provision contained in Sub-section (4), which states that provisions of this Act regarding appeal shall apply, means that all provisions regarding appeals contained in the Act would be applicable while hearing appeal and/or cross objections which includes Sub-section (5) of Section 129A of the Act.

Sub-section (4) of Section 129D further provides "such appeal shall be heard by the Tribunal". Now, the question is what meaning is to be assigned to the words "shall be heard by the Tribunal". The word "heard" is used in relation to the hearing of appeal by the Tribunal. It is used in broad sense to cover the entire stage of appeal and not in the restricted sense of only a particular stage of granting audience at the time of final hearing. If one turns to Sub-section (5) of Section 129A, the opening sentence thereof is, "the Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross objections after expiry of the relevant period referred to in Sub-section (3) or Sub-Section (4), if it is satisfied that there was sufficient cause for not presenting it within that period". The word "admit an appeal or permit the filing of a memorandum of cross objections" would include preliminary hearing, if necessary, at the time of its acceptance or admission of the appeal, if found to be delayed. Therefore, the word "heard" cannot be interpreted in a narrow sense.

Proceeding further, the Sub-section (4) uses the phraseology "as if such application were an appeal." In order to understand the meaning of the phrase "if such application were an appeal" one has to turn to the decided cases one of them being Akhtari Begum v. Appellate Authority, (supra) wherein the words "as if it were an application" were interpreted to mean and imply, that, an application for the renewal of permit is to be treated on par with an original application for a permit. The object of using the phrase "as if such application were an appeal" is to emphasis the fact that such applications were to be as effective as substantive statutory appeal. This constitutes a legal fiction. It is a deeming provision. It is well known that when legislature uses a deeming provision to create a legal fiction, it is always used to achieve a purpose. In State of Travancore-cochin and Others Vs. Shanmugha Vilas Cashew Nut Factory and Others, the Constitution Bench opined that, when a legal fiction is created, one is led to ask at once for what purpose it is created. Once the purpose is ascertained, the Court must give full effect to the statutory fiction and the fiction is to be carried to its logical end. The purpose of a deeming provision herein is to make the provisions of the Act dealing with appeals applicable to the application filed u/s 129D(4).

Mr. Sridharan, during the course of hearing made a submission contending that Sub-section (5) would be very much applicable to the cross objections arising from the provision of Section 129D(4), if filed beyond a period of 45 days but not to the application arising from the very same provision. In other words, the submission is; where a cross objections is filed beyond a period of 45 days, it is open for the Tribunal to admit or permit the filing of cross objections after the expiry of 45 days, if it is satisfied that there was sufficient cause for not presenting it within that period. But at the same time, the Tribunal has no such power while dealing with an application filed u/s 129D(4) of the Act. In our view, the submission is contradictory. It is a little anomalous that the application giving birth to the cross objections would get the benefit of condonation of delay via Sub-section (5) of Section 129A, but the substantive application which can be called the mother application (to be considered at par with appeal) would not be entitled to claim advantage of Sub-section (5) of Section 129A of the Act. As a matter of fact, once the application in the nature of an appeal is filed pursuant to the directions under Sub-section (1) and (2) of Section 129D and the assessee is entitled to file cross objections under Sub-section (4), then both the litigants would fall in the same category or group. Both would be appellants before the Tribunal in their respective capacity entitled to claim benefit of Section 129A(5) which in our opinion would be very much available to the application as well as to the cross objections.

In construing Sub-section (4) and (5) of Section 129A in the light of provisions of Sub-section (4) of Section 129D, with regard to its applicability to the application in the nature of an appeal and the cross objections, it is necessary that the said two Sub-sections need to be construed as a whole "each portion throwing light, if need be, on the rest." The two Sub-sections must be read as part of an integral whole and as being interdependent; an attempt needs to be made in construing them to reconcile them if it is reasonably possible to do so, and to avoid inconsistency. Sub-section (4) and (5) of Section 129A is a composite scheme provided for appeal, as such, they are required to be read together.

Now, let us consider the placement of Sub-section (5) of Section 129A in the scheme of Chapter providing for appeals. The first Section therein is Section 128 which provides for an appeal to the Collector (Appeals). Proviso to Section 128 provides for condonation of delay by the Collector (Appeals), provided, he is satisfied that the appellant was prevented by sufficient cause

from presenting the appeal within the period prescribed. The power to condone delay is provided via proviso to Section 128. Generally speaking, proviso is an exception to the main part of the sections, but it is recognised that in exceptional cases, a proviso may be a substantive provision itself. In other words, a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself.

If one carefully analyses the provisions contained in Chapter XV "Appeals", one would find that the appellate power is bestowed on the different appellate authorities to be exercised in different fact situation enumerated in different sections cataloged hereinbelow:

(a) Section 128(1) of the Act provides for an appeal to Collector (Appeals) to be made within three months from the date of communication of the order or decision appealed against with power to the Collector to permit the appellant to present the appeal within further period of three months. In other words, the provision for condoning delay to the extent of three months is provided in the proviso to Section 128(1) of the Act.

(b) Section 129A(1) provides for an appeal to the Appellate Tribunal to be filed by the aggrieved person within three months from the date of communication of the order mentioned in Clauses (a) to (d) therein with power to the Tribunal in its discretion, to refuse admission of an appeal in respect of the order referred in Clause (b) or (c) or (d) where circumstances mentioned in Sub- clauses (i) to (iii) exist. Sub-section (4) thereof provides for right to file cross objections within 45 days from the date of receipt of notice by the appellant, whereas Sub-section (5) provides for power to condone delay in filing an appeal or cross objections as the case may be.

(c) Section 129A(2) provides that on the directions of the Collector of Customs, subject to formation of an opinion by it that the order of the Collector (Appeals), u/s 128A is not legal and proper and direct the proper officer to file an appeal on his behalf before the Appellate Tribunal against such order. In case of such an appeal, again a power to condone delay is provided in Sub-clause (5) of Section 129A.

(d) Section 129D(1) gives power to the Board, on its own motion, to call for and examine the record of any proceeding in which a Collector of Customs as an adjudicating authority has passed any decision or order under the Act for the purpose of satisfying itself as to legality or propriety of any such decision or order and may, by an order, direct such Collector to apply to the Appellate Tribunal for determination of such points arising out of the decision or order as may be specified by the Board in its order.

(e) Sub-section 129D(2) gives power to the Collector on its own motion, to call for and examine the record of any proceeding in which an adjudicating authority subordinate to him has passed any decision or order under the Act for the purpose of satisfying itself as to legality or propriety of any such decision or order and may, by order, direct such authority to apply to the Collector (Appeals) for the determination of such points arising out of the decision or order as may be specified by the Collector of Customs in its order. Sub-section (3) thereof provides that no order shall be made under Sub-section (1) or Sub-section (2) after expiry of period of two years (subsequently modified to one year) from the date of communication of the decision or order of the adjudicating authority. Whereas, Sub-clause (4) provides that, where in pursuance of an order under Sub-section (1) or Sub-section (2), the adjudicating authority or any officer of customs authorised in this behalf by the Collector of Customs, makes an application to the Appellate Tribunal or the Collector (Appeals) within three months from the date of communication of the order under Sub-section (1) or Sub-Section (2) to the adjudicating authority, such an application shall be heard by the Appellate Tribunal or the Collector (Appeals) as the case may be, as if such applications were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of Sub-Section (4) of Section 129A shall, so far as may be, apply to such an application.

fv 62. The survey of the above appellate provisions demonstrate that the appeal filed under Sub-section (1) of 128 or 129A by the assessee or under Sub-section (2) of 129A on the directions of Collector of Customs, issued under Sub-section (2) all are governed by the provisions of the Act regarding appeals. The parties availing such remedies form one class or group identified as "Appellants", irrespective of the fact, whether the appeal is filed by the assessee or the application is filed by the Revenue or cross objections are preferred by the assessee. All the parties invoking appellate jurisdiction of the Tribunal fall in one category or group. If this be so, can there be a different treatment to a party falling within the same class or group of persons availing the same class of remedy. The answer has to be in the negative. No distinction can be made between the appeal filed by the assessee and the application in the nature of an appeal filed by the Revenue or cross objections filed by the Respondent/assessee as a result of application u/s 129(4). Any classification between them will be arbitrary and irrational. If Section 129D(4) is to be construed as prohibiting the Appellate Tribunal to condone delay viz-a-vis an application filed by the Revenue and at the same time have the power to condone delay in favour of the Appellate Tribunal in the cross objections arising therefrom the very same application would clearly be contrary to the spirit of Article 14 of the Constitution of India which forbids class legislation.

In 1959, in a celebrated case of Ram Krishna Dalmia Vs. Shri Justice S.R. Tendolkar and Others, , the Apex Court observed:

.... The classification must not be arbitrary but must be rational, that is to say, it should be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others and (2) that differentia must have a rational relation to the object sought to be achieved by the Act ...

It is a settled rule of construction that where two constructions of a legislative provision are possible, one consistent with the constitutionality of the measure impugned and the other offending the same, the court will lean towards the former. (See: The State of M.P. and Others Vs. Chhotabhai Jethabhai Patel and Co. and Another, The Court is expected to endevaour as far as possible to construe a statute in such a manner that the constructing results in validity rather than its invalidity and gives effect to the manifest intention of the legislature enacting that statute. (See Krishna Coconut Co. v. E.G.C. and T.M. Committee AIR 1967 SC 973.

If the statute itself or the rule made under it applies unequally to persons or things similarly situated, it would be an instance of a direct violation of the constitutional guarantee and the provision of the statute or the rule in question would have to be struck down. The enactment or the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be accorded to persons or things similarly situated. In such circumstances, the provision of law is required to be interpreted in consonance with the provisions of Article 14 of the Constitution so as to prevent the legislation being exposed to the Constitutional challenge.

The Apex Court in the case of Ms. Githa Hariharan and Another Vs. Reserve Bank of India and Another, held that if on one construction a given statute will become unconstitutional, whereas on another construction, which may be open, the statute remains within the constitutional limits, the Court should prefer the latter on the ground that the Legislature is presumed to have acted in accordance with the Constitution and Courts generally lean in favour of the constitutionality of the statutory provisions.

If one turns to Section 129A which provides for appeals to the Appellate Tribunal, power to condone delay is provided in Sub-section (5) making it a separate substantive provision. It is embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself. Considered from this angle, though Sub-section (5) of Section 129A is embeded in the Section as an independent substantive provision, but in our considered view, Sub- section (5) is a proviso to Sub-section (4) of Section 129A. It is, therefore, logical to hold that any application in the nature of appeal or cross objections arising from the provision of Sub-section (4) of Section 129D would be governed by Sub-section (5) of Section 129A of the Act.

The Apex Court in the case of. M/s. B.R. Enterprises Vs. State of U.P. and Others, held that it is well settled that the Courts should first attempt to uphold the charged provisions and not to invalidate it merely because one of the possible interpretation leads to such a result, howsoever attractive it may be. Thus, where there are two possible interpretations, one invalidating the law and the another upholding, the latter should be adopted.

The Apex Court in the case of Danial Latifi and Another Vs. Union of India, ruled that where on a rule of construction a given statute will become ultra vires or unconstitutional and, therefore, void, whilst on another construction which is permissible, the statute remains effective and operative, the Court will prefer the latter on the ground that legislature does not intend to enact unconstitutional laws. The Court ruled that, the latter interpretation should be accepted. It is well settled that when by appropriate reading of an enactment the validity of the Act can be upheld, such interpretation is required to be accepted by Courts and not the other way.

Considered in the backdrop of the above settled principles of law, no distinction can be made between a person filing an application in the nature of an appeal or cross objections or an appeal in exercise of his substantive right to appeal. All appeals, whether filed by the Revenue or the assessee would fall in one class or group called "appellants." No reasonable classification based on intelligible differentia amongst them is possible. If the belated appeals filed u/s 128(1) or 129A(1) or (2) can be entertained by the appellate authority after the expiry of the relevant period prescribed for filing appeal subject to its satisfaction that there was sufficient cause for not presenting the appeal within the prescribed period, then there is no reasonable cause to hold that the Tribunal has no such power merely because it is an application in the nature of an appeal or cross objections filed under Sub-section (4) of Section 129D of the Act. There is no reason to make differentiation amongst the appellants themselves.

On the above premise, we are of the considered view that the application in the nature of appeal or cross objections falling within the sweep of Sub-section(4) of Section 129D would be entitled for benefit of condonation of delay via Sub-section(5) of Section 129A of the Act.

In the above view of the matter, for the reasons recorded hereinabove, we answer the question in the affirmative i.e. in favour of the Revenue and against the Assessee. Appeal is allowed and remanded back to the Tribunal with direction to consider the application for condonation of delay on its own merits in accordance with law with expeditious despatch at any rate within 3 months from the date of receipt of copy of this order. No order as to costs.