Gujarat High Court
Rajan Prints vs Commissioner Of Central Excise & … on 23 January, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/TAXAP/1524/2011 ORDER DATED: 23/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/TAX APPEAL NO. 1524 of 2011
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RAJAN PRINTS
Versus
COMMISSIONER OF CENTRAL EXCISE & CUSTOMS - SURAT - I
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Appearance:
MR. PARTH RACHCHH, ADVOCATE FOR MR PARESH M DAVE(260) for
the Appellant(s) No. 1
MR. DEEPAK N KHANCHANDANI(7781) for the Opponent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 23/01/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. This appeal is filed under Section 35G of the Central
Excise Act, 1944, being aggrieved by the order dated
16.09.2011 passed by the Customs Excises and Service Tax
Appellate Tribunal West Zonal Bench, Ahmedabad (hereinafter
referred to as the ‘CESTAT’ for short) in Application No.E/COD/
1015/11 to condone the delay of 178 days in filing application
for rectification of mistake against the order dated 01.02.2008
passed by the CESTAT in Appeal No.E/936-937/2007.
2. The appeal is admitted by the order dated 22.02.2012 on
the following substantial questions of law :
“Whether the Tribunal below committed substantial error of law in
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by not following the principles laid down by the Supreme Court in
the case of SUNITADEVI SINGHANIA HOSPITAL TRUST v/s
UNION OF INDIA reported in 2009 (233) ELT 295 (SC).”
3. Brief facts of the case are as under : –
3.1 The appellant is a partnership firm engaged in
undertaking various processes on textile fabrics at the relevant
time. During the period from 01.09.1998 to 14.10.1998, under
the Compounded Levy Scheme, as per Section 3A of the Central
Excise Act, 1944, excise duty was to be paid on the basis of
number of chambers installed in a machine called a Hot AIR
Stenter, whereas excise duties were not to be paid on the actual
production of goods or on the value of the goods at the rate of
1,50,000/- per chamber per month at the relevant time.
3.2 During the course of search and survey by the Central
Excise Officers at the factory premises of the appellant on
14.10.1998, certain documents like 11 kachcha grey reports, a
pocket diary etc., were seized under a pachnama and
statements of various persons were recorded. Thereafter, show-
cause notice dated 12.04.1999 was issued on the ground that
total quantity of 12,74,625 Lac Meters of man-made fabrics was
processed and cleared without payment of excise duties for the
aforesaid period, and demand was quantified at Rs.31,01,851/-.
3.3 The appellant filed reply on 18.05.1999 and thereafter
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order in original dated 31.03.2000 was passed confirming the
demand proposed in the show-cause notice.
3.4 Being aggrieved, the appellant filed an appeal before the
Tribunal. The Tribunal by order dated 03.04.2006 remanded the
case to the Adjudicating Authority for proper quantification of
the amount of duty and also penalty depending upon the duty
found to be liable to be paid.
3.5 In the remand proceedings, the Commissioner passed an
order in original dated 30.04.2007 confirming the demand with
penalty of equal amount against the appellant firm and a
personal penalty of Rs.5,00,000/- was also imposed on the
partner of the appellant firm.
3.6 Being aggrieved, the appeal was filed before the CESTAT,
who by the order dated 01.02.2008, disposed of the appeals
filed by the appellants upholding the order passed by the
Commissioner as regards the demand of the duty as well as
penalty on the appellant firm and deleting the personal penalty
imposed upon the partner of the appellant firm. The Tribunal
also quashed and set aside the confiscation of various quantities
of fabrics and also the properties like land, building, plant,
machinery etc.,
3.7 Being aggrieved, the appellant preferred Tax Appeal
No.1644 of 2009 before this Court within the prescribed period
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of limitation. The appellant, thereafter, sought the permission to
withdraw the appeal for moving appropriate application seeking
rectification of mistake before the Tribunal, which was granted
by order dated 22.07.2010.
3.8 The appellant, thereafter, filed application for rectification
of mistake on 08.03.2011. As there was a delay in preferring
such application, the appellant also filed an application to
condone the delay of 178 days considering from the date of
order passed by this Court from 22.07.2010 till 08.03.2011.
3.9 The Tribunal by impugned order dated 16.09.2011,
rejected the application to condone the delay in view of the
provision of Section 35C(2) of the Central Excise Act, 1944. The
appellant relied upon the decision of the Hon’ble Apex Court in
the case of Sunitadevi Singhania Hospital Trust v/s Union
Of India reported in 2009 (233) ELT 295 (SC), so as to
persuade the Tribunal to condone the delay and contended
that CESTAT has inherent powers to recall the order, if
sufficient cause is shown. The Tribunal, however, considering
the provision of Section 35C(2) of the Central Excise Act, 1944,
passed following order rejecting the application to condone the
delay : –
“5. It can be seen from the above reproduced provisions that
there is a time limit fixed by the statute for filing of
application for rectification of mistake apparent from the
record. In this case before us, there is undisputedly a delay of
178 days in filing of application before the bench. On carefulPage 4 of 16
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perusal of the provisions of Section 35C of Central Excise Act,
1944, we find that we do not have powers to condone the
delay in filing application for rectification of mistake.
6. As regards the judgment relied upon by the learned
counsel, in the case of Sunitadevi Singhania Hospital Trust
we, with ‘respect would like to reproduce Para 30 wherein
their lordships have held:
“30. For the reasons aforementioned, we in exercise of
our jurisdiction under Article 142 of the Constitution of
India set aside the impugned judgment with a direction
to the Tribunal to hear out the appellants afresh on
merit on the said application.
It can be seen from the above reproduced paragraph
that the Apex Court has exercised their extra ordinary
jurisdiction under the Article 142 of the Constitution of India
to set-aside the Tribunal’s judgment and has not laid down
any specific law on condonation of delay in filing application
for rectification of mistake. In our considered-view, the Apex
Court judgment in the case of Sunitadevi Singhania Hospital
Trust is only in respect of civil appeal filed by the said
petitioner before the Hon’ble Supreme Court.
7. In view of the foregoing, we do not find any merits in the
application filed by the applicant for condonation of delay and
the same is rejected. Consequently, the application filed for
rectification of mistake also stands dismissed.”
3.10 Being aggrieved, the appellant has preferred this
appeal, which is admitted for consideration of the aforesaid
substantial question of law.
4. Learned advocate Mr. Parth Rachchh appearing for the
appellant referred to the decision of the Hon’ble Apex Court in
the case of Sunitadevi Singhania Hospital Trust (supra), to
submit that the Tribunal ought to have exercised its inherent
powers beyond the prescribed period of 180 days and the
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Tribunal was required to consider prima facie case of the
appellant in the application for rectification of mistake, which is
described in paragraph No.2 of the application for rectification
of mistake to apply the decision of the Hon’ble Apex Court
relied upon by the appellant, instead of observing that the said
decision was passed while exercising the jurisdiction under
Article 142 of the Constitution of India to set aside the judgment
of the Tribunal. It was submitted that in the said decision,
relied upon by the appellant, the Hon’ble Apex Court has laid
down the specific law vis-a-vis for condonation of delay and the
inherent powers of the Tribunal.
4.1 Learned advocate Mr. Rachchh referred to and relied upon
the following observations of the Hon’ble Apex Court in the
decision of Sunitadevi Singhania Hospital Trust (supra), in
support of his submissions : –
“16. Indisputably, the Tribunal considered the appeals
preferred by the appellants along with the appeals preferred
by two others. It has been contended before us that Dr.
Balabhai Nanavati Hospital had filed Customs Appeal Nos. 61
and 62 of 2006 there against before the High Court which had
been allowed by an order dated 11.1.2007.
17. From the Tribunal which is the final Court of fact, an
assessee is entitled to obtain a judgment wherein all its
contentions have been considered. If what has been
contended before us by the appellants, namely, it indeed had
complied with all the conditions laid down in the Notification
are correct and, thus, was not liable to pay any redemption
fine or penalty, the Tribunal was bound to consider the said
contention.
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18. Apparently, learned Tribunal only considered the
factual matrix involved in the case of M/s Miraj Medical
Centre W. Hospital and not the factual aspect of the matter
involving factual matrix. Appellants’ case had purported to
have been determined on the question of law without taking
into consideration the question whether the law so laid down
by the Tribunal is applicable to the fact of the appellants’ case
or not.
19. It is true that the period of limitation specified in terms
of Sub-Section (2) of Section 129(B) of the Customs Act is
required to be observed but the Tribunal failed to notice that
it has inherent power of recalling its own order if sufficient
cause is shown therefor. The principles of natural justice,
which in a case of this nature, in our opinion, envisage that a
mistake committed by the Tribunal in not noticing the facts
involved in the appeal which would attract the ancillary and/or
incidental power of the Tribunal necessary to discharge its
functions effectively for the purpose of doing justice between
the parties, were required to be complied with.
20. While the judges’ records are considered to be final, it is
now a trite law that when certain questions are raised before
the Court of law or Tribunal but not considered by it, and
when it is brought to its notice, it is the only appropriate
authority to consider the question as to whether the said
contentions are correct or not.
21. For the aforementioned purpose the provisions of
limitation specified in Sub-section (2) of Section 129 B of the
Customs Act would not be attracted. We, however, do not
mean to lay down a law that such an application can be filed at
any time. If such an application is filed within a reasonable
time and if the Court or Tribunal finds that the contention
raised before it by the applicant is prima-facie correct, in
order to do justice, which is being above law, nothing fetters
the judges hands from considering the matter on merit.
22. We may notice that this Court in Grindlays Bank Ltd.
Vs. Central Government Industrial Tribunal and Ors. –
1980(Suppl) SCC 420, held that Industrial Tribunal has an
inherent power to set aside an ex-parte award subject ofPage 7 of 16
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course to the condition that the same has not been published
in the Gazette.
23. Grindlays Bank Ltd.[supra] has been followed by this
Court in Sangham Tape Co. v. Hans Raj [(2005)9 SCC 331],
stating:
“8. The said decision is, therefore, an authority for
the proposition that while an Industrial Court will have
jurisdiction to set aside an ex parte award, but having
regard to the provision contained in Section 17-A of the
Act, an application therefor must be filed before the
expiry of 30 days from the publication thereof. Till then
the Tribunal retains jurisdiction over the dispute
referred to it for adjudication, and only up to that date,
it has the power to entertain an application in
connection with such dispute.
9. It is not in dispute that in the instant case, the High
Court found as of fact that the application for setting
aside the award was filed before the Labour Court after
one month of the publication of the award.
10. In view of this Court’s decision in Grindlays Bank
such jurisdiction could be exercised by the Labour
Court within a limited time frame, namely, within thirty
days from the date of publication of the award. Once an
award becomes enforceable in terms of Section 17-A of
the Act, the Labour Court or the Tribunal, as the case
may be, does not retain any jurisdiction in relation to
setting aside of an award passed by it. In other words,
upon the expiry of 30 days from the date of publication
of the award in the gazette, the same having become
enforceable, the Labour Court would become functus
officio”.
24. Yet again in Rabindra Singh v. Financial Commissioner,
Cooperation, Punjab & Ors. [2008(8)SCALE 242], this Court
held:
“17. What matters for exercise of jurisdiction is the
source of power and not the failure to mention the
correct provisions of law. Even in the absence of any
express provision having regard to the principles of
natural justice in such a proceeding, the courts will
have ample jurisdiction to set aside an ex parte decree,
subject of course to the statutory interdict.”
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25. This Court, however, in a slightly different context in Jet
Ply Wood (P) Ltd. and Anr. vs. Madhukar Nowlakha &
Ors [(2006) 3 SCC 699] opined that even an order permitting
withdrawal of a suit can be allowed to be recalled by a civil
court in exercise of its inherent power.
26. It is only from that point of view this Court passed the
aforementioned order dated 13.4.2007.
27. It may be true, as has been contended by Mr.
Abhichandani, learned senior counsel that Section 14 of the
Limitation Act, 1963 will have no application in view of the
fact that provisions governing limitation are contained in
the Customs Act. It is so for in a matter of this nature the
Tribunal was required to consider the application filed by he
appellant which was filed within a reasonable time. It should
have also considered that the appellant had been bonafide
pursuing its remedies before this Court.”
4.2 Referring to the above observations of the Hon’ble Apex
Court, it was submitted that the Tribunal ought to have
condoned the delay as in the order passed in the appeal
proceedings, the Tribunal failed to take into consideration the
specific submission for non-supply of the relevant documents
made by the appellant being lot register and R.G.-I register,
which were never provided to the appellant, which had
prevented the appellant from proving its case as per the
directions issued by the Tribunal while remanding the matter
back.
4.3 He, therefore, submitted that as the Tribunal has not
followed the principles laid down by the Hon’ble Apex Court in
the case of Sunitadevi Singhania Hospital Trust (supra),
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the impugned order is liable to be quashed and set aside and
the matter be remanded back to the Tribunal.
5. Per contra, learned advocate Mr. Deepak N. Khanchandani
appearing for the respondent submitted that the Tribunal has
considered the provisions of Section 25C(2) of the Central
Excise Act, 1944 and admittedly, the appellant has not filed the
application for rectification of mistake within the period of six
months and as such, the Tribunal has no power to condone the
delay beyond the period of six months. It was further submitted
that the appellant has also failed to explain the delay of 178
days from the date of the order dated 22.07.2010 passed by this
Court permitting the appellant to withdraw the appeal to file
application for rectification of mistake.
5.1 It was further submitted that the Tribunal was bound by
the statutory provisions and has no power to condone the delay
beyond the time limit prescribed therein. It was submitted that
the Hon’ble Apex Court in the case of Sunitadevi Singhania
Hospital Trust (supra), exercised the jurisdiction under
Article 142 of the Constitution of India to do the justice and the
observations made by the Hon’ble Apex Court were required to
be appreciated in the facts of the case before it, more
particularly, when there is no mistake committed by the
Tribunal in not noticing the facts involved in the appeal, which
would attract the ancillary and incidental powers of the Tribunal
necessary to discharge its function effectively for the purpose of
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doing justice between the parties. It was submitted that the
Tribunal has considered the decision of the Commissioner while
upholding the same, and the Commissioner in turn has
considered the aspect of supply of the relied upon documents,
which is referred in the order of the Tribunal. It was submitted
that even otherwise, prima facie, there is no error apparent on
record in the order sought to be rectified by the appellant.
6. Having heard the learned advocates for the respective
parties and considering the facts of the case, it is true that the
Tribunal has referred to the provisions of Section 35C(2), which
provides that the Tribunal may, at any time, within six months
from the date of the order, with a view to rectifying any mistake
apparent on record, amend any order passed by it. In the facts
of the case, the appellant challenged the order passed by the
Tribunal in the Appeal No. 936 of 2007 before this Court, within
the prescribed time limit under Section 35G of the Central
Excise Act, 1944, which was withdrawn on 22.07.2010.
Thereafter, the appellant preferred an application for
rectification of mistake after 178 days beyond the period of six
months without explaining the same and there is delay of 178
days, and therefore, the Tribunal has rightly held that it has no
power to condone the delay in filing the application for
rectification of mistake as the order dated 01.02.2008 was
sought to be rectified in 2011. It is also pertinent to note that
the appellant at no place, in the application to condone the
delay, has even prayed for exclusion of the time spent before
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this Court and as such, has prayed for time spent before this
Court from 09.09.2008 to 22.07.2010. The reliance placed on
behalf of the appellant on the decision of Hon’ble Apex Court in
the case of Sunitadevi Singhania Hospital Trust (supra),
would not be applicable in the facts of the case as the appellant
has failed to point out any mistake committed by the Tribunal
apparent on the face of the record as we have perused the order
passed by the Tribunal in the appeal, wherein the Tribunal after
recording the facts has reproduced the observations of the
Commissioner with regard to the grievance raised by the
appellant for non-supply of the relied upon documents like lot
register and R.G.-I register and after considering the same, the
Tribunal has passed the order in appeal, whereby the order
passed by the Commissioner was upheld. Thus, there are
concurrent findings of facts arrived at by the Tribunal and as
such, the appellant sought to withdraw the appeal in absence of
any substantial question of law arising from the order passed by
the Tribunal in appeal being Tax Appeal No. 936 of 2007 so as
to file the rectification application.
7. Inspite of these facts, the appellant filed rectification
application after more than 7 months and 14 days without there
being any explanation showing or providing cause for such
delay assuming for a while that the time spent by the appellant
from 09.09.2008 till 22.07.2010 is excluded.
8. The Hon’ble Apex Court in the case of Commissioner of
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Customs and Central Excise versus Hongo India Private
Limited and another reported in (2009) 5 SCC 791, while
interpreting the provisions of Sections 35, 35B, 35EE, 35G and
35 H of the Central Excise Act, 1944, held that the language
used in the provisions was clear that the Legislature intended
the Appellate Authority to entertain appeal by condoning delay
up to 30 days and as per unamended provision of Section 35H,
sufficient time of 180 days was prescribed for filing an appeal
and revision, and therefore, it was held that the Section 5 of
Limitation Act, 1963 excluded in absence of laws condoning the
delay by showing sufficient cause after prescribed period. It
was held by the Hon’ble Apex Court as under : –
“32. As pointed out earlier, the language used in Sections
35, 35-B, 35-EE, 35-G and 35-H makes the position clear that
an appeal and reference to the High Court should be made
within 180 days only from the date of communication of the
decision or order. In other words, the language used in other
provisions makes the position clear that the legislature
intended the appellate authority to entertain the appeal by
condoning the delay only up to 30 days after expiry of 60 days
which is the preliminary limitation period for preferring an
appeal. In the absence of any clause condoning the delay by
showing sufficient cause after the prescribed period, there is
complete exclusion of Section 5 of the Limitation Act. The
High Court was, therefore, justified in holding that there was
no power to condone the delay after expiry of the prescribed
period of 180 days.
33. Even otherwise, for filing an appeal to the
Commissioner, and to the Appellate Tribunal as well as
revision to the Central Government, the legislature has
provided 60 days and 90 days respectively, on the other hand,
for filing an appeal and reference to the High Court larger
period of 180 days has been provided with to enable the
Commissioner and the other party to avail the same. We are of
the view that the legislature provided sufficient time, namely,Page 13 of 16
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180 days for filing reference to the High Court which is more
than the period prescribed for an appeal and revision.
34. Though, an argument was raised based on Section 29 of
the Limitation Act, even assuming that Section 29(2) would be
attracted what we have to determine is whether the provisions
of this section are expressly excluded in the case of reference
to High Court.
35. It was contended before us that the words “expressly
excluded” would mean that there must be an express
reference made in the special or local law to the specific
provisions of the Limitation Act of which the operation is to be
excluded. In this regard, we have to see the scheme of the
special law here in this case is Central Excise Act. The nature
of the remedy provided therein are such that the legislature
intended it to be a complete Code by itself which alone should
govern the several matters provided by it. If, on an
examination of the relevant provisions, it is clear that the
provisions of the Limitation Act are necessarily excluded, then
the benefits conferred therein cannot be called in aid to
supplement the provisions of the Act. In our considered view,
that even in a case where the special law does not exclude the
provisions of Sections 4 to 24 of the Limitation Act by an
express reference, it would nonetheless be open to the court
to examine whether and to what extent, the nature of those
provisions or the nature of the subject-matter and scheme of
the special law exclude their operation. In other words, the
applicability of the provisions of the Limitation Act, therefore,
to be judged not from the terms of the Limitation Act but by
the provisions of the Central Excise Act relating to filing of
reference application to the High Court.
36. The scheme of the Central Excise Act, 1944 support the
conclusion that the time limit prescribed under Section 35H(1)
to make a reference to High Court is absolute and
unextendable by court under Section 5 of the Limitation Act. It
is well settled law that it is the duty of the court to respect the
legislative intent and by giving liberal interpretation,
limitation cannot be extended by invoking the provisions
of Section 5 of the Act.
37. In the light of the above discussion, we hold that the
High Court has no power to condone the delay in filing the
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unamended Section 35H(1) of the Central Excise Act, 1944
beyond the prescribed period of 180 days and rightly
dismissed the reference on the ground of limitation.”
9. Section 35C(2) of the Central Excise Act, 1944, reads
thus : –
“(2) The Appellate Tribunal may, at any time within [six
months] from the date of the order, with a view to rectifying
any mistake apparent from the record, amend any order
passed by it under sub-section (1) and shall make such
amendments if the mistake is brought to its notice by the
[Principal Commissioner of Central Excise or Commissioner of
Central Excise] or the other party to the appeal:
Provided that an amendment which has the effect of
enhancing an assessment or reducing a refund or otherwise
increasing the liability of the other party, shall not be made
under this sub-section, unless the Appellate Tribunal has
given notice to him of its intention to do so and has allowed
him a reasonable opportunity of being heard.
(2A) The Appellate Tribunal shall, where it is possible to do so,
hear and decide every appeal within a period of three years
from the date on which such appeal is filed”
10. There is no clause permitting the Tribunal to condone the
delay. It is pertinent to note that Section 35C(2) has been
amended with effect from 11.05.2002 vide Section 140(i) of Act
of 20 of 2002 to reduce the time limit from four years to six
months for rectification of the mistake in the order of the
Appellate Tribunal. Thus, the Legislature in his wisdom has
fixed the time period of six months to rectify any mistake
apparent on record in the order of the Tribunal within a period
of six months only, and as such the Tribunal has no power to
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extend the period prescribed beyond six months to entertain any
application for rectification of mistake. Therefore, respectfully
following the decision of the Hon’ble Supreme Court in the case
of Hongo India Private Limited (supra), which is a Larger
Bench of Hon’ble three Judges and later decision dated
27.03.2009 as to the decision of the Apex Court in the case of
the Sunitadevi Singhania Hospital Trust (supra), dated
17.11.2008 rendered by the Bench strength of the Hon’ble Two
Judges, we are of the opinion that though the reasoning given
by the Tribunal in paragraph No. 6 may not be sufficient,
however, the conclusion arrived at by the Tribunal is in
accordance with law, and therefore, we answer the question in
negative i.e. in favour of the Revenue and against the assessee.
The appeal, therefore stands DISMISSED. No order as to costs.
sd/-
(BHARGAV D. KARIA, J)
sd/-
(D.N.RAY,J)
AMAR SINGH
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