2009 (5) TMI 659 - AT - Central Excise

Tribunal Rejects Delayed Rectification Request Under Central Excise Act

The Tribunal rejected the Appellant's request for condonation of delay in filing Rectification of Mistake (ROM) under Section 35C(2) of the Central Excise ... Rectification of mistake - Limitation - Condonation of delay ISSUES PRESENTED AND CONSIDERED 1. Whether the Tribunal may condone delay in filing an application for rectification of mistake (ROM) under the statutory time-limit prescribed by Section 35C(2) of the Central Excise Act where the ROM is filed beyond six months from receipt of the Tribunal's order. 2. Whether the Tribunal possesses inherent or recall power to entertain a time-barred ROM application in the interest of justice, having regard to the decision of the Supreme Court that permitted recalling/reopening in exceptional circumstances. 3. Whether an appeal to the High Court (subsequently withdrawn with liberty to approach the Tribunal) constitutes sufficient cause to excuse delay in filing a ROM in the Tribunal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Power to condone delay under Section 35C(2): legal framework Legal framework: Section 35C(2) of the Central Excise Act prescribes a statutory limitation of six months for seeking rectification of mistake in the Tribunal's order. Where the statute supplies a specific limitation period, that period is intended to be strictly applied and not extended by general limitation provisions. Precedent treatment: Multiple Tribunal benches and High Courts have consistently held that ROM applications filed beyond the six-month period under the specific statutory provision are barred by limitation. Higher courts have affirmed that general powers to condone delay (for example under Section 5 of the Limitation Act) cannot be invoked to override a specific statutory limitation, as doing so would render the special provision otiose. Interpretation and reasoning: The Tribunal examined the admitted fact of delay (more than one year and three months) and the statutory bar created by Section 35C(2). Given the repeated judicial position emphasizing strict application of a statutory limitation, the Tribunal found that the statute must be followed and the time limit cannot be relaxed by the Tribunal in ordinary course. Ratio vs. Obiter: The conclusion that a statutory six-month period under Section 35C(2) must be strictly enforced and that delay beyond that period is liable to be rejected is treated as ratio applicable to cases falling within the same statutory regime. Conclusions: The Tribunal concluded that the ROM was time-barred under Section 35C(2) and that established authorities support dismissal of such delayed applications. Accordingly, the ROM could not be entertained on the ground of limitation. Issue 2 - Inherent/recall power and applicability of exceptional Supreme Court authority Legal framework: The question arises whether the Tribunal has an inherent or recall power to reopen or recall its order and condone delay in the interest of justice despite a statutory bar. The Tribunal considered higher authority permitting recall/reopening only in exceptional circumstances, including where appellate or supervisory courts have exercised extraordinary jurisdiction. Precedent treatment: The Tribunal considered a Supreme Court decision that permitted recall/reopening in exceptional circumstances and invoked extraordinary powers (including under constitutional provisions) to meet the ends of justice. However, the judiciary has emphasized that such relief is exceptional and should not be treated as a general licence to file ROMs at any time. Interpretation and reasoning: The Tribunal distinguished the exceptional Supreme Court authority on the ground that that decision arose from unique facts (e.g., common order erroneously treating distinct appellants alike and prior remand directions not followed), and the Supreme Court's exercise of jurisdiction was extraordinary and fact-specific. The Tribunal held that the cited authority does not lay down a general principle permitting unlimited time for ROMs or permitting the Tribunal routinely to condone delay beyond the statutory period. Ratio vs. Obiter: The Tribunal treated the restrictive view - that exceptional reopenings by superior courts do not create a general power to condone statutory limitation - as the binding ratio for its decision. Observations about the exceptional nature of the Supreme Court's exercise of jurisdiction were applied as distinguishing dicta (binding to the extent facts differ). Conclusions: The Tribunal concluded that the Supreme Court's exceptional relief could not be applied to the present facts to justify condonation of delay. The Tribunal rejected the submission that it enjoyed an unfettered inherent power to condone time-barred ROMs in ordinary cases. Issue 3 - Effect of withdrawal of appeal to High Court with liberty to approach Tribunal as a ground for condoning delay Legal framework: Delay may be excused if sufficient cause is shown. An appellant's engagement with another forum can, in appropriate circumstances, amount to sufficient cause for delay only if it explains the chronology and the absence of culpable laches. Precedent treatment: Authorities require clear explanation for delay; mere filing or withdrawing of an appeal is not automatically a ground to excuse delay unless the litigant reasonably and adequately accounts for the period lost by bona fide pursuit of remedies elsewhere. Interpretation and reasoning: The Tribunal found it was an admitted fact that the appeal to the High Court was withdrawn with liberty to approach the Tribunal, but the Applicants failed to explain why the appeal was withdrawn instead of pursued, and did not offer an adequate explanation for the long delay between receipt of the Tribunal's order and filing the ROM. The application for condonation likewise did not satisfactorily explain the delay. Thus, the asserted reason (pursuit of remedy in the High Court) did not constitute sufficient cause to condone the delay. Ratio vs. Obiter: The Tribunal's finding that withdrawal of a High Court appeal with liberty to reapproach the Tribunal does not, without satisfactory explanation, constitute sufficient cause for condoning substantial delay is treated as the operative ratio in the circumstances of this case. Conclusions: The Tribunal held that the plea based on pursuing/withdrawing the High Court appeal did not justify extending time for a ROM. The Miscellaneous Application for condonation was rejected for lack of sufficient cause and culpable explanation. Final Disposition Applying the statutory limitation contained in Section 35C(2), recent and consistent authorities upholding strict application of such limitation, and distinguishing the exceptional Supreme Court authority relied upon by the Applicants, the Tribunal dismissed the Miscellaneous Application for condonation of delay and consequently dismissed the ROM as barred by limitation.