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of <h1>Commissioner must decide appeal on merits after dismissal order set aside under Article 226</h1> <h3>E.T.A. General Pvt. Ltd. Versus The Additional Commissioner of Central Excise, The Commissioner of Service Tax (Appeals-II)</h3> E.T.A. General Pvt. Ltd. Versus The Additional Commissioner of Central Excise, The Commissioner of Service Tax (Appeals-II) - 2016 (44) S.T.R. 409 (Mad.) The core legal questions considered by the Court include:1. Whether the appellate authority was justified in rejecting the appeal on the ground of limitation, particularly after a prior writ court order directing registration of the appeal without examining the sufficiency of cause for delay.2. Whether the appellate authority could examine the cause shown for delay and condone or reject the appeal despite the writ court's earlier direction.3. Whether the appellate authority was legally competent to decide the appeal on merits after holding it to be time barred.4. The maintainability of the writ petition challenging the appellate authority's order when an alternative remedy of appeal before the CESTAT exists.Issue-wise Detailed AnalysisIssue 1: Justification for Rejection of Appeal on Ground of Limitation after Writ Court DirectionLegal Framework and Precedents: Section 85(3) of the relevant Act (pre-amendment) prescribed a three-month period to file appeal with a further grace period of three months upon showing sufficient cause. The Finance Bill, 2012, amended these periods reducing the time limits effective from 28.05.2012.The writ court in W.P.No.21811 of 2013 held that the limitation period applicable to the appeal filed should be that prevailing at the time of the impugned order (29.02.2012), i.e., three months plus grace period, and not the reduced period effective from 28.05.2012. It directed the appellate authority to register the appeal and decide on merits without rejecting it as barred by limitation.Court's Interpretation and Reasoning: The Court emphasized that since the appeal was filed within the extended period applicable at the time of the original order, the appellate authority erred in rejecting the appeal on limitation grounds after the writ court's direction.Evidence and Findings: The appeal was filed on 14.08.2012, within the extended limitation period calculated from the date of the original order (09.03.2012).Application of Law to Facts: The appellate authority's rejection on limitation grounds was contrary to the writ court's binding direction and the applicable law at the time of the original order.Treatment of Competing Arguments: The Revenue contended that the appellate authority rightly considered the delay and cause for condonation, but the Court held that the writ court's direction precluded re-examination of limitation.Conclusion: The appellate authority was not justified in rejecting the appeal as time barred after the writ court's order directing registration.Issue 2: Competence of Appellate Authority to Examine Cause for Delay after Writ Court DirectionLegal Framework: The writ court's order explicitly directed registration of the appeal if otherwise in order, without delving into sufficiency of cause for delay.Court's Reasoning: The Court held that once the writ court directs registration, the appellate authority cannot revisit the question of sufficiency of cause or condone delay. The appellate authority's action in examining and rejecting the cause for delay was contrary to the writ court's order and hence impermissible.Evidence: The appellate authority rejected the appeal on the ground that misplacement of papers by counsel was not sufficient cause for condonation of delay.Application: The appellate authority's rejection on this ground was a direct contravention of the writ court's binding direction.Competing Arguments: The Revenue argued that the appellate authority was entitled to examine the delay cause, but the Court rejected this in view of the writ court's explicit direction.Conclusion: The appellate authority was precluded from examining the cause for delay and rejecting the appeal on limitation grounds after the writ court's direction.Issue 3: Legality of Deciding Appeal on Merits after Holding it Time BarredLegal Framework and Precedents: The Court relied on the Supreme Court decision in State Bank of India v. B.S. Agricultural Industries, which held that a forum must not decide a complaint on merits if it is barred by limitation and no sufficient cause for delay is shown. Deciding on merits despite limitation bar constitutes illegality.The Allahabad High Court in Commissioner of Customs, Central Excise & Service Tax v. M/s. Monsanto Manufacturer Pvt. Ltd. applied this principle to appeals before the Tribunal, holding that if an appeal is barred by limitation, the Tribunal cannot proceed to decide on merits.Court's Interpretation: The Court found that the appellate authority had dismissed the appeal both on delay and merits, which was impermissible under the above precedents.Evidence: The appellate order showed dismissal on both grounds.Application: The appellate authority's decision on merits after holding the appeal time barred was illegal and liable to be set aside.Competing Arguments: The Revenue argued that the matter could be challenged before the CESTAT, but the Court held that the illegality could be corrected at this stage under Article 226.Conclusion: The appellate authority's decision on merits after rejecting the appeal as time barred was illegal.Issue 4: Maintainability of Writ Petition When Alternative Remedy ExistsLegal Framework: Generally, availability of alternative statutory remedy bars writ petitions. However, writ petitions are maintainable when the act complained of is per se illegal or contrary to statute.Court's Reasoning: Since the appellate authority committed illegality by deciding the appeal on merits despite limitation bar, the writ petition challenging such illegal act was maintainable.Competing Arguments: The Revenue contended that the appellant should have pursued the appeal before CESTAT, but the Court declined to accept this, emphasizing the illegality of the appellate order.Conclusion: The writ petition challenging the illegal appellate order was maintainable.Significant Holdings'When the Writ Court, vide order in W.P.No.21811 of 2013, dated 13.08.2013, has already directed the Commissioner of Service Tax (Appeals) to register the appeal, if the same is otherwise in order, we are of the considered view that it is not open to the appellate authority to examine the cause and to reject the appeal, as time barred.''If the complaint is barred by time and yet, the consumer forum decides the complaint on merits, the forum would be committing an illegality and, therefore, the aggrieved party would be entitled to have such order set aside.' (quoting Supreme Court in State Bank of India case)'The appellate authority's decision to dismiss the appeal both on delay and merits is illegal and liable to be set aside.''When the Hon'ble Supreme Court has described the manner of disposal of an appeal, as illegality, the same can be corrected by this Court, in exercise of the powers under Article 226 of the Constitution of India.'Core principles established include:A writ court's binding direction to register an appeal precludes the appellate authority from re-examining limitation or sufficiency of cause for delay.An appellate authority or tribunal cannot decide an appeal on merits if it is barred by limitation and no sufficient cause for delay is shown.Illegality committed by an appellate authority in disposing of appeals contrary to statutory provisions or binding court directions can be corrected by writ jurisdiction despite availability of alternative remedies.Proper adherence to limitation provisions and procedural directions is mandatory and failure to do so vitiates the appellate order.Final determinations:The appellate authority's order rejecting the appeal on limitation grounds after writ court's direction was illegal and set aside.The appellate authority was not competent to examine cause for delay or condone delay after the writ court's order directing registration.The appellate authority's decision on merits after holding the appeal time barred was illegal and set aside.The matter is remanded to the appellate authority for fresh adjudication on merits strictly in accordance with law and without revisiting delay or limitation issues.
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