2024 (1) TMI 959 - HC - Central Excise

Revenue's Appeal Dismissed: Tribunal's Ruling on Cenvat Credit Limitation Upheld; Filing Delays Criticized.

Commissioner, Central Excise Commissionerate, Sonepat (Delhi-III) Versus M/s. Ultratech Cement Ltd.

The HC dismissed the Revenue's appeal against the Tribunal's decision. The Tribunal had ruled the demand for cenvat credit was barred by limitation, ... Condonation of delay in filing appeal - appeal barred by 1754 days in re-filing - no sufficient reasons for the delay - denial of CENVAT Credit - inputs - various iron and steel items which had been used for supporting the structures. - HELD THAT:- On merit, the issue has been settled in favour of the assessee and, therefore, it is not felt that in the present case, the issue of limitation and whether there is any suppression as such needs to be gone into, as argued by counsel for the Revenue since on merits the issue stands decided against it. The appeal is also patently time barred and there is no ground to condone the delay in refiling since initially it was filed by a separate counsel way back on 27.06.2015 and had been returned with objections on 10.07.2015. The appeal was re-filed on 18.02.2016 by the earlier counsel and had been returned on 28.03.2016 and re-filed on 11.04.2016. The same was returned on 04.06.2016 to the said counsel which had been re-filed on 09.06.2016 and had been returned on 08.08.2016. In the application for condonation of delay, it has been mentioned that the earlier counsel did not return the original set of documents by saying that the original file has been misplaced and is not traceable and he is no longer on the panel - the fact remains that after the returning of the appeal in August, 2016, the present appeal was filed by preparing a fresh paper book only on 23.05.2022 and there is nothing to show in the application as to what transpired from August, 2016 to 23.05.2022 and, thus, the inordinate delay as such which has occurred in refiling thereafter also cannot be justified in any manner. In the absence of any sufficient cause having been shown, even on the issue of limitation, the delay is not liable to be condoned. Appeal dismissed. Issues:The appeal by the Revenue is challenging the final order passed by the Custom, Excise & Service Tax Appellate Tribunal, New Delhi. The main issues are the limitation period for the demand of cenvat credit, the decision of a larger Bench regarding the availability of cenvat credit for iron and steel items, and the subsequent reversal of the decision by the Division Bench of the Chhattisgarh High Court.Issue 1 - Limitation Period:The Tribunal concluded that the demand was barred by limitation as the show cause notice proposing denial of cenvat credit was issued after a significant delay from the relevant period. The Tribunal found no malafide on the part of the appellant due to subsequent changes in the law. The issue of limitation was settled in favor of the assessee based on the merits of the case.Issue 2 - Availability of Cenvat Credit:A larger Bench of the Tribunal had previously held that cenvat credit would not be available for certain iron and steel items used for supporting structures. However, this decision was later reversed by the Division Bench of the Chhattisgarh High Court, citing judgments from other High Courts. The benefit regarding the issue of structures embedded in the earth was granted based on the prospective operation of the amendment to the Cenvat Credit Rules, 2004.Issue 3 - Condonation of Delay:The appeal was found to be time-barred and the delay in refiling was not justified. Despite attempts to refile the appeal over several years, including citing the misplacement of original documents by the earlier counsel, the inordinate delay in refiling could not be explained satisfactorily. The Court emphasized the need for timely filing and condonation of delay within reasonable limits, ultimately dismissing the appeal due to the excessive delay.Conclusion:The High Court dismissed the appeal, considering the settlement of the issue in favor of the assessee on merits, the reversal of the Tribunal's decision by the Division Bench, and the failure to justify the inordinate delay in refiling the appeal. The judgment highlights the importance of timely filing and the consequences of undue delays in the legal process.