2001 (3) TMI 101 - SC - Customs

Appeal allowed where prima facie fraud shown; Section 17 Limitation Act required tribunal to consider appeal, not rely on precedent

The SC allowed the appeal, holding the tribunal erred in refusing to condone delay. Where prima facie fraud was shown, the tribunal should have applied ... Condonation of the delay - Limitation - claimed 'acrylamide' was a synthetic adhesive - entitlement to duty free clearance against value based advanced licences pertaining to the export of leather goods - HELD THAT:- The appellant thereupon filed the appeal before the Customs, Excise and Gold (Control) Appellate Tribunal whereon the order under challenge was passed. It sought condonation of delay in filing the appeal setting out in some detail the reason for which the appeal had been filed after the period of limitation. The Tribunal declined to condone the delay, taking the view that the judgment of this Court in Ajit Singh Thakur & Anr. v. State of Gujarat [1981 (1) TMI 272 - SUPREME COURT] was applicable and that it could not look into the nature of the grounds of appeal. The Tribunal would appear to have lost sight of the cardinal principle which is enshrined in Section 17 of the Limitation Act that fraud nullifies everything. If the Tribunal was satisfied, as it ought to have been upon these facts, that there might be some fraud, there was every reason for it to condone the delay and to hear the appeal. The judgment in Ajit Singh Thakur's case has no application to facts such as these. The appeal is allowed. The order under appeal is set aside. The application for condonation of delay is allowed. Issues Involved: Appeal against the order of Customs, Excise and Gold (Control) Appellate Tribunal for delay in filing appeal and validity of duty free clearance for 'acrylamide' as a synthetic adhesive.Issue 1: Delay in Filing AppealThe Customs, Excise and Gold (Control) Appellate Tribunal declined to condone the delay in filing the appeal by the Revenue, citing the judgment in Ajit Singh Thakur's case [(1981) 1 SCC 495] and stating it could not consider the grounds of appeal. However, the Supreme Court emphasized the principle that fraud nullifies everything as per Section 17 of the Limitation Act, and highlighted the need to investigate potential fraud in the case. The Court held that the Tribunal erred in not condoning the delay and directed the Tribunal to hear the appeal on its merits without being influenced by its earlier order.Issue 2: Duty Free Clearance for 'Acrylamide'The respondent claimed duty free clearance for 'acrylamide' as a synthetic adhesive against value-based advanced licenses for exporting leather goods. The Assistant Commissioner of Customs initially rejected the claim, but the Commissioner (Appeals) later accepted it based on expert opinions and certificates from various sources including V.M. Divate, Mitsubishi Chemicals, Professor D.D. Kale, and the Deputy Chief Chemist. Subsequently, doubts arose regarding the authenticity of some documents relied upon by the respondent, leading to an investigation by the Central Intelligence Unit of the Mumbai Custom House. Despite these doubts, the Supreme Court did not delve into the specifics of the duty free clearance issue in this judgment.Separate Judgement:The Supreme Court allowed the appeal, set aside the Tribunal's order, granted condonation of delay, and instructed the Tribunal to hear the appeal on its merits without considering the previous order. No costs were awarded in this matter.