Writ jurisdiction may still intervene when a time-barred appeal masks non-consideration of a substantial defence and causes injustice.

A statutory appeal barred by limitation does not automatically foreclose Article 226 relief in exceptional cases. The note explains that where the original adjudication ignores a vital defence and non-consideration causes failure of justice or gross injustice, the writ court may interfere despite the limitation bar. It also notes that a substantial taxability defence, including the contention that reimbursed expenses should not form part of taxable value and reliance on an earlier High Court view, must be examined on merits by the appellate authority. The matter was therefore restored for fresh consideration after compliance with the conditions imposed.

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Issues: (i) whether the writ court could interfere where the statutory appeal had been rejected as time-barred and the case disclosed exceptional circumstances warranting exercise of jurisdiction under Article 226 of the Constitution of India; (ii) whether the assessee's substantial defence on taxability, based on the challenge to inclusion of reimbursed expenses and the effect of the earlier Delhi High Court decision, had to be examined on merits by the appellate authority.

Issue (i): whether the writ court could interfere where the statutory appeal had been rejected as time-barred and the case disclosed exceptional circumstances warranting exercise of jurisdiction under Article 226 of the Constitution of India.

Analysis: The statutory scheme under Section 35 of the Central Excise Act, 1944 does not permit condonation beyond the prescribed outer limit, so the appellate authority was justified in treating the appeal as barred by limitation. Even so, the availability of writ jurisdiction under Article 226 of the Constitution of India is not excluded in every such case. Where the original order suffers from non-consideration of a vital defence, resulting in failure of justice or gross injustice, interference can be justified notwithstanding the limitation bar at the appellate stage.

Conclusion: The case was held to be fit for exercise of writ jurisdiction and interference with the appellate orders was warranted.

Issue (ii): whether the assessee's substantial defence on taxability, based on the challenge to inclusion of reimbursed expenses and the effect of the earlier Delhi High Court decision, had to be examined on merits by the appellate authority.

Analysis: The Court noted that the assessee had a substantial defence on merits, including the contention that reimbursed expenses could not form part of the taxable value and that the cited Delhi High Court view supported its stand. That defence had not been considered in the original adjudication. In such circumstances, denial of consideration on merits by the appellate authority would cause miscarriage of justice, and the matter required restoration for fresh consideration after hearing the assessee.

Conclusion: The impugned orders were set aside and the matter was restored to the appellate authority for decision on merits after compliance with the imposed conditions.

Final Conclusion: The petition succeeded to the extent that the limitation-based rejection was not allowed to prevent merits-based adjudication, and the dispute was sent back for fresh consideration with conditions of deposit and costs.

Ratio Decidendi: Even where a statutory appeal is barred by limitation, writ jurisdiction may be exercised in exceptional cases to correct an order that ignores a substantial defence and thereby causes failure of justice or gross injustice.

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