Appeal before Commissioner (Appeals) - Limitation
TIME taken to pursue the appeal in the wrong forum to be excluded - Principles of Section 14 of the Limitation Act applicable - Supreme Court
It is by now an accepted law that the Commissioner (Appeals) under the Indirect Taxes has no power to condone the delay beyond a period of 90 days. And it is said that no authority in the Country has the power to condone this delay. All other authorities under the law have powers - inherent or otherwise to condone delay.
In this Customs case before the Supreme Court, the appellant had imported a ship and had given a bank guarantee for some differential duty. On 25.3.1992, the Collector of Customs, Rajkot, directed the Assistant Collector, Bhavnagar to encash the bank guarantee furnished by the appellant. On 2.4.1992, the Superintendent of Customs and Central Excise sent a letter to the appellant communicating the decision of the Collector. The bank guarantee was duly encashed on 3.4.1992. After protesting against the said illegal action of the Department in encashing the bank guarantee, the appellant preferred an appeal against the Superintendent's letter dated 2.4.1992 and the Collector's order dated 25.3.1992 before CEGAT. On 23.6.1998, the Appellate Tribunal allowed the appeal and set aside the order of the Collector dated 25.3.1992. In the year 2000, the Department preferred an appeal before the Supreme Court. On 12.3.2003, the Supreme Court allowed the appeal holding that the letter of the Superintendent was appealable to the Commissioner (Appeals) and not the Tribunal. The Supreme Court held that the Tribunal passed the order without any jurisdiction and so the order cannot be sustained.
Immediately after the judgement, the importer filed an appeal before the Commissioner (Appeals), which was promptly dismissed as filed after 11 years. The importer is back in the Supreme Court through the legal channels.
Now, the Supreme Court held that though Section 14 of the Limitation Act (Exclusion of time of proceeding bona fide in court without jurisdiction) is not applicable in a Customs case, the principle on which Section 14 is based, being principles, which advance the cause of justice, would nevertheless apply. The Supreme Court observed that there is a vital distinction between extending time and condoning delay. The Supreme Court held that exclusion of Section 14 or the principles contained in Section 14 would be unduly harsh and would not advance the cause of justice.
The Supreme Court concluded, the principle of Section 14 which is a principle based on advancing the cause of justice would certainly apply to exclude time taken in prosecuting proceedings which are bona fide and with due diligence pursued, which ultimately end without a decision on the merits of the case.
There is hope at the end of the tunnel - 23 years after the bank guarantee was encashed, the issue is before the Commissioner (Appeals) - and it can go again up to the Supreme Court.
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