2021 (8) TMI 551 - HC - Central Excise

Court quashes order, directs compliance with pre-deposit, allows Writ Petition.

The court quashed the impugned order and directed the petitioner to comply with the pre-deposit condition within four weeks. Upon compliance, the 1st ... Pre-deposit requirement for entertainment of appeal under the Central Excise Act - condonation of delay and limitation under Section 85(3A) of the Finance Act, 1994 - reopening and adjudication of appeal on merits after compliance with statutory conditionsPre-deposit requirement for entertainment of appeal under the Central Excise Act - reopening and adjudication of appeal on merits after compliance with statutory conditions - Validity of rejection of the appeal for non-compliance with the mandatory pre-deposit condition and the consequent direction given to the appellant. - HELD THAT: - The Court found that the impugned order rejected the appeal inter alia for failure to make the mandatory pre-deposit required for entertaining an appeal under the Central Excise Act. The petitioner explained non-payment by stating that its bank accounts were frozen and has tendered readiness to make the pre-deposit. Observing that the aggrieved party ought to have an opportunity to have the appeal decided on merits where statutory conditions can be complied with, the Court quashed the impugned order and directed the petitioner to comply with the pre-deposit condition within four weeks. Upon such compliance the Commissioner (Appeals) is directed to entertain and dispose of the appeal on merits and in accordance with law after affording opportunity to all parties. [Paras 3, 6, 7]Impugned rejection for non-compliance with the pre-deposit requirement quashed; petitioner directed to make pre-deposit within four weeks and, on compliance, the appeal to be entertained and disposed of on merits.Condonation of delay and limitation under Section 85(3A) of the Finance Act, 1994 - reopening and adjudication of appeal on merits after compliance with statutory conditions - Permissibility of entertaining an appeal filed beyond the prescribed period where condonation was sought and the appeal was belatedly filed during pendency of a writ petition. - HELD THAT: - The impugned order also rejected the appeal on the ground of delay under the time-limits and condonation provisions embodied in the impugned order (referring to the three-month outer limit under Section 85(3A) of the Finance Act, 1994). The petitioner contended the delay arose in view of the pendency of a writ appeal before the Division Bench. The Court observed that where reasons for delay are acceptable, the forum empowered to condone delay should consider them and, if satisfied, condone the delay to enable adjudication on merits. Consequently, the Court quashed the order rejecting the appeal for delay and directed that, upon re-presentation after compliance with the pre-deposit condition, the Commissioner (Appeals) shall entertain and decide the appeal on merits, affording all parties an opportunity, including consideration of condonation of delay in accordance with law. [Paras 4, 5, 6, 7]Rejection of the appeal for having been filed beyond the statutory period quashed; on re-presentation after pre-deposit, the Commissioner (Appeals) to consider condonation of delay and decide the appeal on merits.Final Conclusion: The impugned order in Appeal No.145/2018-ST dated 24.08.2018 is quashed. The petitioner is directed to make the pre-deposit contemplated under the Central Excise Act within four weeks and re-present the appeal; upon receipt of the appeal complying with the Act, the Commissioner (Appeals) shall entertain and dispose of the appeal on merits and in accordance with law after affording opportunity to all parties. No order as to costs. Issues:Challenge to order in appeal due to non-compliance with pre-deposit condition and delay in filing the appeal.Analysis:The petitioner challenged the order in appeal passed by the 1st respondent, contending that the appeal against the Order-in-Original was dismissed for failure to comply with the mandatory pre-deposit under the Central Excise Act. The petitioner, now willing to pay the pre-deposit, had earlier refrained due to frozen bank accounts. However, the impugned order rejected the appeal not only for non-compliance with the pre-deposit but also for delay in filing the appeal.The impugned order highlighted that the appeal was filed over a year after receiving the Order-in-Original, exceeding the prescribed time limit for filing. The appellant sought condonation of delay, stating it was due to approval from higher authorities. The Commissioner (Appeals) can condone delays beyond two months for a further month if satisfied with the reasons. However, the appeal in this case was filed well beyond the permissible period, breaching Section 85(3A) of the Finance Act, 1994.The court emphasized that appeals by aggrieved parties must be decided on merits under all circumstances. Acceptable reasons for delay should be considered to provide a fair opportunity for adjudication. In this case, the petitioner failed to make the mandatory pre-deposit due to frozen bank accounts and filed the appeal belatedly during the pendency of a Writ Appeal before the Division Bench of the High Court.Consequently, the court quashed the impugned order and directed the petitioner to comply with the pre-deposit condition within four weeks. Upon compliance, the 1st respondent was instructed to entertain and dispose of the appeal on merits, ensuring due process for all parties involved. The Writ Petition was allowed without costs, and the connected Miscellaneous Petition was closed.