2025 (1) TMI 356 - AT - Customs

Tribunal Overturns Rejection Due to Filing Delay, Orders Fresh Hearing on Merits Within Three Months.

The Tribunal set aside the rejection of the appellant's appeal, which was initially dismissed due to a delay in filing. The Tribunal found that the ... Time Limitation - Rejection of appeal on the ground of delay - HELD THAT:- It is observed that apparently the appeal has been filed beyond the period of limitation meant for filing the appeal before Commissioner (Appeals) in terms of Section 128 of Customs Act, 1962. However, from the copy of the grounds of appeal filed before Commissioner (Appeals), it is observed that the reason for the delay that occurred in filing the said appeal was sufficiently explained by the appellant. However, the impugned order has not dealt with those reasons. The appeal has mechanically been rejected on ground of limitation by quoting the provision of Customs Act, 1962 and the decision of Hon’ble High Court Delhi in the case of DELTA IMPEX VERSUS COMMISSIONER OF CUSTOMS (ACU) , NEW DELHI [2004 (2) TMI 81 - HIGH COURT OF DELHI]. There is no discussion about the explanation given by the appellant for the delay that has occurred. Though, the Commissioner (Appeals) having no statutory power to condone the delay beyond 90 days of the receipt of order in original, seen from that perspective no infirmity can be found in the impugned order. In view of the explanation given by the appellant, the appeal was otherwise well within time when it was filed before Commissioner (Appeals). There has been catena of decisions referring that the matter shall be referred to be disposed on merits and the plea of limitation has to be dealt with liberally. Conclusion - The appeal filed on 30.02.2019 is within one month of date of receipt of order in original with the appellant. Keeping in view that there is nothing on or record, otherwise to show that the appellant deliberately had caused the impugned delay. Otherwise also while appellant is not going to gain anything while causing delay in filing the appeal. Present is deemed to be a fit case to be re-heard by Commissioner (Appeals) vis-à-vis the merits of the appeal. Resultantly, the matter remanded back for de-novo adjudication on merits without discussing the aspect of limitation - appeal allowed by way of remand. ISSUES PRESENTED AND CONSIDERED 1. Whether the Commissioner (Appeals) was justified in rejecting an appeal solely on the ground of limitation without considering the appellant's explained reasons for delay. 2. Whether the Commissioner (Appeals) has statutory power to condone delay beyond the prescribed discretionary period and the legal consequence of such limitation on the power to entertain an appeal. 3. Whether procedural fairness / principles of natural justice require adjudicatory consideration of an explanation for delay before mechanically rejecting an appeal on limitation grounds. 4. Whether remand for fresh adjudication on merits is appropriate where the appellate authority has not considered the explanation for delay and there is no evidence of deliberate or inexcusable laches by the appellant. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Rejection of appeal solely on ground of limitation without considering explanation for delay Legal framework: Appeal provisions under the Customs legislative scheme prescribe a period for filing appeals before the Commissioner (Appeals) and prescribe limited discretion for condonation of delay. Precedent Treatment: The impugned order relied upon a High Court decision treating limitation strictly; the Tribunal also referenced an Apex Court authority regarding the outer reach of appellate condonation power. Interpretation and reasoning: The Court observed from the grounds of appeal that the appellant had furnished sufficient explanation for the delay. The impugned order, however, did not engage with or adjudicate those explanations and instead mechanically rejected the appeal by citing the statutory provision and precedent. The Tribunal emphasized that an appellate order must deal with the explanation tendered and cannot be a mere formulaic recital resulting in automatic dismissal. Ratio vs. Obiter: Ratio - An appellate authority must consider and record reasons on the explanation for delay before rejecting an appeal on limitation grounds; mechanistic rejection without dealing with the explanation is unsustainable. Obiter - The exact standard of sufficiency of an explanation in every factual permutation remains contextual. Conclusion: The rejection was procedurally flawed because the explanation for delay was not considered; this procedural omission justified intervention. Issue 2 - Extent of statutory power to condone delay and implications for dismissal Legal framework: Statutory limitation period and the maximum discretionary window available to the Commissioner (Appeals) to condone delay under the Customs Act. Precedent Treatment: The Court acknowledged authority that limits condonation power of the appellate authority beyond a specified outer period and drew support from an Apex Court pronouncement on the subject. Interpretation and reasoning: The Tribunal recognized that where the appeal was filed beyond the statutory discretionary period, the Commissioner (Appeals) may lack power to condone the delay. However, the Tribunal distinguished that legal limitation from the procedural duty to consider the explanation. If the explanation shows the appeal was filed within the discretionary period as effectively received by the appellant (i.e., counting from actual notice), the authority's power dynamics change. Thus, the statutory limitation is a substantive constraint but does not absolve the appellate authority from considering explanations properly. Ratio vs. Obiter: Ratio - The absence of statutory power to condone delay beyond a defined outer limit stands; however, the authority still must record its reasoning on the explanation when within or relevant to the discretionary window. Obiter - Practical interplay between receipt of order and computation of limitation may vary by facts. Conclusion: Statutory limitations cap condonation power, but this does not permit mechanical dismissal; factual determination of when limitation begins (actual notice) and consideration of explanations are necessary preliminaries. Issue 3 - Principles of natural justice and requirement to consider explanation for delay Legal framework: Principles of natural justice require that a party be heard on material grounds affecting its right to appeal; reasoned decision-making is a component of fair adjudication. Precedent Treatment: The Tribunal cited general jurisprudence favoring liberal approach to condonation where justice so requires and preventing merits being foreclosed by technicality. Interpretation and reasoning: The failure to examine and record the appellant's explanation amounted to denial of opportunity to have the matter adjudicated on merits. Given that the appellant proffered reasons - misplacement of the order by an employee, delay in amendment of Bill of Entry due to incorrect consignee details, application for waiver of penalty - the Tribunal held that these explanations warranted consideration under natural justice before limitation-based rejection. The Tribunal further noted the equitable policy that ordinarily a litigant does not benefit from delay and that condonation, where proper, permits adjudication on merits rather than dismissal at threshold. Ratio vs. Obiter: Ratio - Procedural fairness requires that the appellate authority consider and record reasons concerning delay; failure to do so violates natural justice and is grounds for remand. Obiter - The equitable presumption that appellants do not gain by delay is a guiding principle supporting liberal treatment. Conclusion: Principles of natural justice mandated adjudicatory consideration of the explanation; absence of such consideration rendered the impugned order infirm. Issue 4 - Appropriate remedy where appellate authority fails to consider explanation and no deliberate misconduct is shown Legal framework: Remedies include remand for de novo consideration versus outright dismissal; courts/tribunals may remit matters for fresh hearing where procedural defect prejudices determination on merits. Precedent Treatment: The Tribunal relied on established jurisprudential policy that refusal to condone delay can result in denial of justice, and that matters should be decided on merit where possible. Interpretation and reasoning: The Tribunal found no record that the appellant deliberately caused delay or sought to gain by delay. The appeal, when reckoned from the date of actual notice, fell within a one-month period; furthermore, substantive reasons (error in Bill of Entry, administrative amendment time, pending waiver application) supported non-deliberate delay. Balancing prejudice, the Tribunal found no demonstrable prejudice to the department if the matter proceeded to merits. Accordingly, the Tribunal remanded the matter for de novo adjudication by the Commissioner (Appeals), directing a fresh decision within a specified period after affording hearing to both parties. Ratio vs. Obiter: Ratio - Where an appellate order dismisses an appeal without considering explanations for delay and there is no evidence of deliberate dilatory conduct, remand for fresh adjudication on merits is an appropriate remedy. Obiter - Time limits for remand compliance and procedural directions are case-specific. Conclusion: The matter was remanded for de novo consideration on merits after affording opportunity of hearing; directions to decide within a fixed period were given to avoid further prejudice.