2025 (3) TMI 964 - HC - Central Excise

Application for 546-Day Delay in Filing Appeal Denied; No 'Sufficient Cause' Under Section 35G of Central Excise Act.

M/s. Vandana Global Limited Versus Commissioner, Central Excise & Customs, Central Excise Chhattisgarh.

The HC denied the appellant's application for condonation of a 546-day delay in filing an appeal under Section 35G of the Central Excise Act, 1944. The ... Condonation of inordinate delay of 546 days in filing the appeal - sufficient cause for delay or not - HELD THAT:- It is not in dispute that the appellant’s appeal before the CESTAT was dismissed on merits on 27-7-2016 and it is also not in dispute that appeal under Section 35G of the Act of 1944 was preferred by the appellant only on 23-6-2018, whereas the appeal has to be preferred within 180 days from the date of communication of the order to the aggrieved party. As such, it is filed with an inordinate delay in filing the appeal i.e. 546 days and the reason assigned in the application is only and only that Tax Case No.59/2011 was pending before this Court in which the question of law involved in this appeal is also required to be adjudicated and once it has been adjudicated by this Court in Tax Case No. 59/2011 on 13-9-2017, the appeal came to be filed. In this regard, the legal position pertaining to the question whether while considering the plea for condonation of delay, the Court can look into the merits of the matter, is well settled and recently it has been held so by their Lordships of the Supreme Court in the matter of H. Guruswamy and others v. A. Krishnaiah since deceased by LRs [2025 (1) TMI 1524 - SUPREME COURT] in which it has been held that while considering the plea for condonation of delay, the court must not start with the merits of the main matter, and observed as 'While considering the plea for condonation of delay, the court must not start with the merits of the main matter. The court owes a duty to first ascertain the bona fides of the explanation offered by the party seeking condonation. It is only if the sufficient cause assigned by the litigant and the opposition of the other side is equally balanced that the court may bring into aid the merits of the matter for the purpose of condoning the delay.' The appellant was required to prefer appeal immediately after the impugned order dated 27-7-2016 was communicated to him. Even after the judgment in Tax Case No. 59/2011 was passed on 13-9-2017, he took more than nine months’ time to file appeal. Therefore, no cause much less sufficient cause has been shown for delay in filing the appeal. Conclusion - The appellant has shown sufficient cause for condoning the delay of 546 days in filing the appeal, the delay cannot be condoned. Appeal dismissed. ISSUES PRESENTED and CONSIDEREDThe primary issue considered in this judgment was whether the delay of 546 days in filing an appeal under Section 35G of the Central Excise Act, 1944, could be condoned. The appellant sought condonation of delay based on the pendency of a related legal issue in another case, Tax Case No. 59/2011, which was decided after the deadline for filing the appeal had passed.ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe appeal was governed by Section 35G of the Central Excise Act, 1944, which requires appeals to be filed within 180 days from the date of communication of the order to the aggrieved party. The appellant filed the appeal with a delay of 546 days. The legal framework for condonation of delay requires a demonstration of 'sufficient cause' for the delay.Two key precedents were referenced: the Supreme Court's decisions in H. Guruswamy and others v. A. Krishnaiah and Delhi Development Authority v. Tejpal and others. These cases established that the merits of the case should not be considered when deciding on condonation of delay and that a subsequent change in law is not a valid ground for condonation.Court's Interpretation and ReasoningThe Court emphasized that the merits of the case should not be considered when deciding on the condonation of delay. The Court highlighted the necessity of evaluating the bona fides of the explanation offered for the delay. The Court referred to the precedent set by the Supreme Court, which cautioned against allowing changes in law as a reason for condoning delays, as it could lead to reopening numerous cases and disrupt the finality of proceedings.Key Evidence and FindingsThe appellant argued that the delay was justified due to the pendency of a related legal issue in Tax Case No. 59/2011, which was decided on 13-9-2017. However, the Court noted that even after the resolution of that case, the appellant took more than nine months to file the appeal. The Court found no sufficient cause for the delay, as the appellant was required to file the appeal within 180 days of the original order from 27-7-2016.Application of Law to FactsThe Court applied the established legal principles to the facts of the case, concluding that the appellant failed to demonstrate a sufficient cause for the delay. The delay was not justified merely by the pendency of a related case, especially given the additional nine-month delay after the related case was resolved.Treatment of Competing ArgumentsThe appellant's argument centered on the pendency of a related legal issue, while the respondent contended that the merits of the case should not influence the decision on condonation of delay. The Court sided with the respondent, adhering to the legal principle that the merits of the case should not be considered in delay condonation applications and that subsequent changes in law are not valid grounds for condonation.ConclusionsThe Court concluded that the appellant did not show sufficient cause for the delay in filing the appeal. The application for condonation of delay was rejected, and consequently, the tax case was dismissed.SIGNIFICANT HOLDINGSThe Court reiterated the principle that the merits of the case should not be considered when deciding on condonation of delay, as emphasized in H. Guruswamy and others v. A. Krishnaiah. The Court also reaffirmed the position that a subsequent change in law is not a valid ground for condonation, as articulated in Delhi Development Authority v. Tejpal and others.Core Principles EstablishedThe judgment reinforced the principle that delay in filing appeals must be justified by sufficient cause, independent of the merits of the case. It also underscored the importance of maintaining the finality of legal proceedings by not allowing changes in law to serve as grounds for reopening cases.Final Determinations on Each IssueThe application for condonation of delay was denied, and the appeal was dismissed due to the appellant's failure to demonstrate sufficient cause for the 546-day delay in filing the appeal.