M/s M. S. Electronics v. Union of India

Order

[Per Deshmukh, J.]

1. Heard learned counsel Mr. S. M. Godsay for the Appellant and learned A.S.G. Mr. Alok Sharma for Respondent Nos.1 to 5.

We have heard learned counsel for Appellant and learned A.S.G. Mr. Alok Sharma for Respondent. Both agree that record and proceeding is not necessary. This appeal can be considered finally, at the stage of admission. Therefore, with the consent of the parties present appeal is taken up forthwith for final hearing.

3. Mr. Godsay for the Appellants relied on two judgments reference to which we would make later. Learned A.S.G. Mr. Alok Sharma pointed out judgment of the Supreme Court in the matter of “Singh Enterprises V/s Commissioner of C. Ex., Jamshedpur” reported in 2008 (221) E.L.T. 163 (S.C.). Another judgment relied upon by learned A.S.G. Mr. Alok Sharma is the judgment of Division Bench of this Court in the case of “Navinon Ltd. V/s Union of India” reported in 2008 (12) S.T.R. 84 (Bom).

4. Before adverting to the submissions of learned counsel and reliance -:(3):- placed on judgments of the Supreme Court and this Court, we wish to list uncontrovertial facts in this case. (a) The Appellant No.1 is a proprietary concerned, operating at MIDC area, Ahmednagar. (b) The Appellant No.1, at the relevant time, was engaged in manufacturing receivers falling under Chapter No.8527.10 of the schedule to the Central Excise Tariff Act, 1985. (c) The Appellant No.2 is the proprietor of the Appellant No.1 proprietary concern. (d) The Preventive Officers, Central Excise & Customs, Aurangabad booked the case on 21st November, 2001. (e) The Assistant Commissioner, Central Excise and Customs, Ahmednagar passed an order OIO No.83/CEX/04-05 and confirmed the demand of Rs. 80,892/- and imposed a penalty of Rs.10,000/-. (f) The Excise Department vide their EA-2 application filed an appeal with Central Excise Service Tax Appellate Tribunal [CESTAT, for short]. In other words, the Excise department was aggrieved by the order passed i.e. OIO, by the learned Assistant Commissioner, Central Excise and Customs, imposing a penalty of Rs.10,000/- and confirming demand of Rs.80,982/-. That was the reason for the Central Excise Department to move the CESTAT. (g) (h) It is not in dispute that CESTAT remitted the case for re-adjudication On remand, the case has been decided by the learned Deputy Commissioner, Central Excise and Customs, Ahmednagar vide OIO No. 26/CEX/06-07 by the order dated 27th February, 2007 thereby imposing penalty of Rs.2,73,802/- [Rupees two Lakhs seventy three thousands eight hundred two -:(4):- only]. This penalty was imposed on Appeal No.1 the Propriatory concern. Apart from this imposition of penalty, learned Deputy Commissioner also imposed a penalty of Rs.50,000/- upon Appellant No.2, the sole proprietor. (i) (j) The Appellants preferred appeal along with application for stay. The learned Commissioner (Appeals) dismissed the appeal by OIO No.RKR (158) 10/08. (k) The Appellants, being aggrieved by the order passed by the learned Commissioner (Appeals) preferred an appeal before the CESTAT, Zonal Branch, Mumbai (West Zone). It was registered as Appeal No.E/524/08-MOM along with application No.E/Stay/839/09-MOM. (l) The learned CESTAT dismissed the appeal. This order, passed by the learned CESTAT dated 4th of December, 2008, is challenged in this appeal, by filing this appeal on 29th March, 2009.

5. Mr. Godsay, learned counsel for the Appellants, made twofold submission before us. According to the Appellants, the appeal filed by the appellants, challenging the order passed by the learned Assistant Commissioner Central Excise & Customs, was otherwise meritorious. The authorities concerned did not consider this aspect of the matter and on technicality i.e. on the ground that the appeal was filed beyond the period of limitation, mechanically dismissed the appeal. His further submission is that in the interest of justice the authorities concerned ought to have taken into consideration the submissions made on behalf of the appellants and/ or the grounds raised for condonation of delay. Another submission made by learned counsel Mr. Godsay for the Appellants, is in respect of the powers of the -:(5):- Appellate Tribunal considering the order passed by the learned Commissioner (Appeals). According to him, at-least the Appellate Authority ought to have considered these aspects of the matter and quashed and set aside the order passed by the learned Assistant Commissioner (Excise) imposing penalty on the Appellant No.1 and Appellant No.2 as well. During the course of arguments, he also tried to point out circumstances i.e. Alleged illness of the Appellant No.2 during the relevant period because of which the appeal could not be filed before the Appellate Authority on behalf of both the Appellants within limitation. Learned A.S.G. Mr. Alok Sharma supported the judgment of the authorities.

6. The excise duty, in fact, is a tax on the manufacture or production of goods. The sales tax, however, is a tax on act of sale. Thus, the taxable event for central excise duty is manufacture or production of goods. Excise duties, forms a largest source of revenue to the central government. The development activities to be carried by the Union of India in its territory, may immensely depend on revenue collection from this branch i. e. central excise. These duties are levied and collected by the Central Excise Department under the authority of the Central Excise Act, 1944 and Central Excise Rules, 1944. Section 2 (a) has defined “adjudicating authority” as any authority competent to pass any order or decision under the Central Excise Act, 1944. However, the Central Board of Excise & Customs, constituted under the Central Boards of Revenue Act, 1963, Commissioner of Central Excise (Appeals) or Appellate Tribunal are excluded from the definition of “adjudicating authority” under section 2 (a) of the Act of 1944. We have also considered definition of “excisable goods” under section 2 (d) of the Act of 1944. -:(6):-

7. In the case on hand, we are concerned with section 35, titled as “Appeals to Commissioner (Appeals), under Chapter No. VI-A of the Act of

1944. There is no dispute among the lawyers appearing for the parties, that the provision laid down under section 35 i. e. Appeals to Commissioner (Appeals) under Chapter No.VI-A of the Act of 1944, is applicable. This section 35 of the Act of 1944 provides a scheme of appeals to Commissioner (Appeals). Subsection (1) of section 35 lays down that any person aggrieved by any decision or order passed under the Act of 1944 by the Central Excise Officer, lower in rank than Commissioner of Central Excise, may appeal to the Commissioner of Central Excise (Appeals); such appeal under subsection (1) of section 35 to the Commissioner (Appeals) has been provided within three months from the date of the communication to him of such decision or order. Proviso to sub-section (1) of section 35 provides that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within a period of three months, allow it to be presented within a further period of three months. Thus, three months is the period of limitation from the date of communication of the decision or order and the person aggrieved by said communication or order, within three months from such date of communication to him, if feels aggrieved, may file appeal to the Commissioner (Appeals). This period of three months from the date of communication of the order has been extended by the period of further three months, to the aggrieved person, on showing sufficient cause. Thus, in its totality three months plus three months i. e. 90 days plus 90 days, which comes to 180 days is the period of limitation with extension embodied under -:(7):- subsection (1) of section 35 for presenting appeal to the Commissioner (Appeals). Subsection (2) of section 35 gives the modality and form of the appeal, prescribed under the rules to be filed to the Commissioner (Appeals). This subsection (2) of section 35 also obligates the aggrieved person to file such an appeal, duly verified in the prescribed manner. The procedure in appeal has been provided under section 35-A. . In the present appeal, we are considering the scheme of subsection (1) of section 35 of the Act of 1944. While parting with subjection (1) of section 35, it is noticed that the period of 180 days in its totality has been provided for presenting an appeal to the Commissioner (Appeals). We have noticed the amendment to sub-section 1 of section 35 by Act No.14 of 2001. Instead of presenting an appeal within three months, the said period has been curtailed and by amendment has been brought down to within a period of 60 days from the date of communication of the decision or order to any person. Proviso of subsection (1) of section 35 is also amended and the period of 90 days has been brought down to period of 30 days. In other words, after amendment to subsection (1) of section 35 the total period made available to the aggrieved person for presenting an appeal is brought to 90 days from 120 days. The provision laid down under section 35, making available period of 90 plus 90 i.e. 180 days is relevant in the case on hand. This has been accepted by learned counsel Mr. Godsay, by making reference to page No.92 of the compilation wherein the learned Member (Technical) i.e. CESTAT has observed that “it is not disputed that in this case the appeal has been filed after the expiry of 90 days period”. Factually, in the case on hand, there is no dispute that the appeal -:(8):- has been presented to the Commissioner (Appeals) by the Appellants beyond the period of 180 days.

8. The learned counsel for the Appellant, Shri Godsay, has invited our attention to section 35-B of the Act of 1944. He submits that in the case on hand the appeal was presented under subclause (1) of subsection (1) of section 35-B of the Act of 1944. There is no dispute over this proposition. Learned counsel for the Appellant makes reference to subsection (3) of section 35-B. According to him, if the appeal is presented to the Appellate Tribunal under section 35 (1), by any person aggrieved by orders enumerated under section 35 (B) passed by various authorities, such appeal shall have to be filed within a period of three months from the date on which the order sought to be appealed is communicated to the Commissioner of Central Excise or as the case may be the other party preferring the appeal. With this subsection (3) of section 35-B he points out sub-section (5) of section 35-B which contemplates remedy of filing of appeal to the Appellate Tribunal referred under subsection (3) or subsection (4) of section 35-B and on his satisfaction that there was sufficient cause for not presenting the appeal within that period delay can be condoned. Such powers are also vested with the Appellate Tribunal in case of cross objection i. e. to condone the delay. According to learned counsel Mr. Godsay, therefore, the Appellate Tribunal, on satisfaction, may condone the delay while admitting the appeal or cross objection filed by the aggrieved person in view of subsection (3) or subsection (4) of section 35-B. Mr. Godsay further submits that in view of this provision of section 35-B appeal presented to the Commissioner (Appeals) under subsection (1) of section 35 also could have -:(9):- been considered and delay occurred in filing the appeal ought to have been condoned by the Commissioner (Appeals) and/ or Appellate Tribunal i. e. CESTAT. . In our view, there is basic distinction in subsection (1) of section 35 and subsection (5) of section 35-B of the Act of 1944. Under subsection (1) of section 35 appeals to Commissioner (Appeals) have been provided. Such appeals can be filed by any person aggrieved by any decision order order passed under the Act by the Central Excise Officer, lower in rank than Commissioner of Central Excise. Period provided under subsection (1) of section 35 embodied is three months from the date of communication to him of such decision or order and this three months’ period has been further extended by three months to such aggrieved person if he satisfies the Commissioner (Appeals) that he was prevented by sufficient cause from presenting the appeal within the period of three months. Thus, under subsection (1) of section 35 a case of providing period of 180 days from the date of communication of the order or decision to the aggrieved person has been provided. This subsection (1) of section 35 seems to be a water-tight compartment made by the statute without leaving any room for doubt, for entertaining or admitting the appeal by Commissioner of Appeals beyond this period. In other words, powers of extending period of limitation beyond the period of 180 days to the Commissioner (Appeals) has been aborted. There is no statutory power vested with the Commissioner (Appeals) to entertain any appeal by the aggrieved person beyond the period of 180 days for whatsoever may be the ground or reason. The language of subsection (1) of section 35 in its entirety is material. -:(10):- Many a times various contingencies, difficulties, may occur. While providing the period of 180 days, it seems that subsection (1) has made available period of 90 days from the date of communication of the order to the aggrieved person of any decision or order and proviso thereto appended making available another period of 90 days if the person aggrieved satisfies the Appellate Authority i. e. Commissioner (Appeals) that he was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, made available under subsection (1) of section 35, power is vested with the learned Commissioner (Appeals) to entertain the appeal. Thus, an in-built mechanism has been provided by sub-section 1 with its proviso to section 35 putting outer limit of 180 days from the date of communication of the order or decision for filing an appeal. Thus, the provision laid down under subsection (1) of section 35 with its scheme available at the relevant time does not empower the learned Commissioner (Appeals) to venture in an inquiry as to whether the aggrieved person was prevented by sufficient cause or any other reason beyond the period of 180 days and condone that delay.

9. We shall now consider the scheme of section 35-B of the Act of 1944. If we read subsection (3) and (5) of section 35-B, we find different is the case with the scheme of section 35-B. Here, the appeals have been provided to the Appellate Tribunal, by aggrieved person, aggrieved by the decisions or orders. Under subsection (3) period of appeal has been provided and powers have been conferred upon learned Tribunal under subsection (5) to entertain the appeal or cross objection beyond the relevant period referred in subsection (3) and (4) on satisfaction that there were sufficient reasons for not presenting appeal within -:(11):- that period. In view of this inherent distinction under subsection (1) of section 35 on the one hand and subsection (3), (4) and (5) of section 35-B on the other hand, it is not possible for us to countenance to the submissions made by learned counsel Mr. Godsay for the Appellants.

10. Mr. Godsay, learned counsel relied on a judgment of Division Bench of this Court at Nagpur in the matter of “Uniworth Textiles Ltd. Through its General Manager V/s Commissioner of Central Excise and Customs and Customs, Excise and Service Tax Appellate Tribunal, West Zone Bench” in Letters Patent Appeal No.231 of 2007 in Writ Petition No.563 of 2007. There the learned Division Bench of this Court has noticed the judgment of the Supreme Court in the matter of “Singh Enterprises V. Commissioner of C. Ex. Jamshedpur” (supra). Factually, in the matter of Uniworth Textiles (supra) the order passed by learned Single Bench of this Court in Writ Petition No.563 of 2007 was brought in question before the learned Division Bench of this Court in L.P.A. No.231 of 2007. We have considered the judgment of learned Division Bench of this Court in L.P.A. No.231 of 2007. There, the delay of 65 days was condoned by the learned Division Bench while considering the provision laid down under section 35-B of the Act of 1944. This judgment indisputably is not under section 35, the scheme of which we are considering. The facts in the matter of Uniworth Textiles (Supra) are altogether different. Scheme of section 35-B, as we have referred to in the foregoing paragraphs, was considered by the learned Division Bench of this Court. This judgment, in our considered view, does not help the Appellants. -:(12):-

11. The judgment of the Supreme Court in the matter of “Singh Enterprises” (supra) has been made available by learned A.S.G. Mr. Alok Sharma. It is the judgment of the Supreme Court in Civil Appeal No.5949 of 2007 decided on 14th December, 2007. Order passed by the learned Division Bench of Jharkhand High Court, dismissing the writ petition, filed by Singh Enterprises, was challenged before the Supreme Court. Before the High Court, order passed by the Commissioner (Appeals), Central Excise and Sales Tax, Ranchi, dismissing the appeal filed by the appellant therein i. e. Singh Enterprises, under section 35 of the Central Excise Act, 1944, was challenged. Dismissal of the appeal by the Commissioner (Appeals) was only on the ground that it was filed after twelve months of the date of service of the original order and the Appellate Authority did not have power to condone the delay beyond the period of 30 days from the date of expiry of 60 days provided for filing statutory appeal. Therefore, learned Division Bench had noted that the learned Commissioner (Appeals) had no power of condonation beyond the statutory prescribed period. The Supreme Court has considered the provision laid down under section 35 of the Act of 1944. In para 8, the Supreme Court has observed that “The Commissioner of Central Excise (Appeals) as also the Tribunal being creatures of Statute are vested with jurisdiction to condone the delay beyond the permissible period provided under the Statute. The period upto which the prayer for condonation can be accepted is statutorily provided. Ultimately, the Supreme Court held that the Commissioner and the High Court were justified in holding that there was no power to condone the delay after the expiry of 30 days period. In our view, the facts obtaining in the case on hand are nearer to the facts available to the Supreme Court in the matter of Singh Enterprises -:(13):- (supra). Judgment and ratio of the Supreme Court judgment in the matter of Singh Enterprises (supra), therefore, squarely applies to the case on hand.

12. Extension of prescribed period in certain cases, is the matter covered by section 5 of Limitation Act, 1963. We have noticed section 3 of Limitation Act,

1963. It is bar of limitation. In our view, section 3, 5 and 29 of Limitation Act are relevant and important. These three sections of Limitation Act i. e. sections 3, 5 and 29 have been considered by the learned Division Bench of this Court in the matter of “Navinon Ltd.” (supra). It is significant to notice that there also section 35 of the Act of 1944 was considered by this Court. Various judgments of the Supreme Court have been noticed by the learned Division Bench of this Court. We are in agreement with the view taken by the learned Division Bench of this Court in the matter of “Navinon Ltd.” (supra).

13. While parting with the appeal, we may reproduce para 15 and 16 of the judgment in the matter of "Navinon Ltd." [Supra]: “15. The legal position that emerges from the various pronouncements referred to above is that the provisions of Limitation Act, 1963 apply only to ‘courts’. Such courts may not be civil Courts. These courts may not necessarily be constituted under the Code of Civil Procedure or the Code of Criminal Procedure. The forum that functions as a court or has trappings of the court would be a court for the purposes of applicability of the Limitation Act, 1963. The jurisdiction to entertain proceedings, appeals or revisions under the special laws is sometimes given to -:(14):- the ordinary courts, and sometimes given to separate tribunals constituted under the special law. Such tribunals constituted under the special law which function as courts or having trappings of courts may be treated as courts for the purposes of the Limitation Act, 1963 but not all bodies or authorities hearing appeals or revisions under special law, having no trappings of the court or which do not function as a court.” “16. The Commissioner of Central Excise (Appeals) empowered to hear appeals under Section 35 of Central Excise Act, in our considered view, cannot be treated to be forum functioning as a court nor the said authority can be said to have trappings of the court. The Commissioner of Excise (Appeals), though, is a appellate authority under Section 35 but his decisions do not satisfy the essential tests of judicial pronouncement. He cannot be said to possess the attributes of a court. In the entire Central Excise Act, there is no provision which even makes the Commissioner of Central Excise (Appeals) a court for limited or specific purpose. The appellate authority under Section 35 of the Central Excise Act is only executive authority; true it is while hearing the appeals contemplated under Section 35, 5he Commissioner of Central Excise (Appeals) acts quasi judicially. But that would not make commissioner, Central Excise a court or an authority functioning as a court or having the trappings of a court. In view of the admitted position that the appeal was preferred by the present petitioner under Section 35 beyond 30 days of the expiry of statutory period of 60 days, the Commissioner of Central Excise (Appeals) cannot be said to have -:(15):- committed any error in not entertaining the appeals as barred by limitation prescribed under Section 35 of the Central Excise Act.”

14. In this view of the matter, we do not find any substantial question of law in the appeal.

15. First Appeal, therefore, fails and accordingly dismissed. No order as to costs.

16. In view of final disposal of the first appeal itself, civil application No. 5628 of 2009 does not survive and the same also stands disposed of. [S. S. SHINDE, J.] [S. B. DESHMUKH, J.] Dated:15.06.2009. ans/1263