2025 (12) TMI 1735 - HC - Central Excise

Restoration of appeal dismissed for long, unexplained delay-'sufficient cause' rejected; refusal to condone seven-year delay upheld.

The dominant issue was whether the tribunal's refusal to restore an appeal/application dismissed for unexplained delay should be interfered with in writ ... Belated filing of appeal - Dismissal of application filed by the petitioner on the ground that the same has been filed after a gap of seven years - HELD THAT:- It is interesting to note that the Mandali was already represented by an advocate in all the proceedings. However, neither the advocate nor the petitioner was vigilant enough to pursue the proceedings of Excise Appeal No. 10587 of 2016 in which there was a delay of 98 days. Thus, Excise Appeal No. 10587 of 2016 was belatedly filed having a delay of 98 days and, when the CESTAT directed the petitioner – Mandali to file an appropriate response explaining the delay, nothing was done. Hence, the CESTAT was constrained to dismiss the appeal vide order dated 19.09.2017. The order dated 19.09.2017 reflects that no one remained present on behalf of the petitioner despite extending an opportunity to the petitioner for filing an affidavit. Thus, the petitioner – Mandali was negligent on four counts, firstly, in filing the appeal belatedly by 98 days; secondly, in not explaining the delay of 98 days despite the directions of the CESTAT; thirdly, in not remaining present in the proceedings; and fourthly, in filing the restoration application after a gap of seven (7) years. There are no convincing reason to interfere with the order passed by the CESTAT in view of the fact that the petitioner – Mandali has been negligent in pursuing the legal remedy before the CESTAT - the High Court is not convinced that merely because the petitioner – Mandali was closed down, it lost track of the proceedings which it had filed challenging the Order-in-Original dated 23.07.2015. Reference made to the decision of the Supreme Court in the case of Sheo Raj Singh vs. Union of India [2023 (11) TMI 814 - SUPREME COURT], wherein the Supreme Court has revisited the power of the High Court in condoning delay while examining the expression “sufficient cause”. The Apex Court has set aside the order passed by the High Court condoning the delay of 479 days. It is held that 'It is sort of a defensive action. Calling something as just an “excuse” would imply that the explanation proffered is believed not to be true. Thus said, there is no formula that caters to all situations and, therefore, each case for condonation of delay based on existence or absence of sufficient cause has to be decided on its own facts. At this stage, we cannot but lament that it is only excuses, and not explanations, that are more often accepted for condonation of long delays to safeguard public interest from those hidden forces whose sole agenda is to ensure that a meritorious claim does not reach the higher courts for adjudication.' In the present petition, the petitioner – Mandali was pursuing the remedy of challenging the appeal in which it was called upon to file an affidavit explaining the delay of 98 days, which it did not do, and ultimately, the Misc. Application seeking condonation of delay of 98 days was rejected. The same was responded to by the petitioner after a gap of seven years by filing a Misc. Application for restoration of the application seeking condonation of delay of 98 days. The Apex Court has cautioned that care must be taken to distinguish an explanation from an excuse, since an excuse is often offered by a person to deny responsibility and consequences when under attack, and each case for condonation of delay based on existence or absence of sufficient cause has to be decided on its own facts. The only “excuse” which the petitioner has tendered for the delay is financial constraint. No other plausible explanation for delay is forthcoming from the petitioner. Petition dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether the Tribunal committed any perversity or illegality in refusing to restore/recall its earlier dismissal order by rejecting the restoration application filed after a gap of seven years, when the only explanation offered was financial crisis and closure of business. 2. Whether financial constraint/closure of business, in the facts found, constituted 'sufficient cause' to justify restoration after seven years and to warrant interference in writ jurisdiction with the Tribunal's discretionary order on delay/restoration. 3. Whether an order of the Tribunal condoning a much longer delay in another matter could govern the present case, or stood distinguished on material facts so as not to aid the petitioner. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of the Tribunal's refusal to restore/recall after seven years Legal framework (as considered by the Court): The Court treated restoration/recall in the context of delay as a discretionary determination dependent on the adequacy of the cause shown, and assessed whether the Tribunal's exercise of discretion suffered from perversity or illegality warranting writ interference. Interpretation and reasoning: The Court noted as undisputed that the restoration application was filed more than seven years after dismissal. It emphasized that the Tribunal had earlier granted an opportunity to support delay-condonation (for a 98-day delay in filing the appeal) by filing an affidavit; despite representation through an advocate, no affidavit was filed and no one remained present, resulting in dismissal. The Court found continued lack of diligence thereafter: the petitioner did nothing for seven years and then sought restoration on the solitary ground of financial struggle/closure. The Court accepted the Tribunal's assessment that there was no convincing explanation for both the earlier non-compliance and the subsequent seven-year inaction. Conclusion: The Court held there was no convincing reason to interfere; the Tribunal's rejection of restoration after seven years, given the petitioner's repeated negligence and absence of satisfactory explanation, was upheld. Issue 2: Whether financial crisis/closure amounted to 'sufficient cause' on these facts Legal framework (as applied by the Court): The Court applied the principle that condonation/restoration turns on the 'sufficiency of the cause shown' and the acceptability of the explanation, requiring a distinction between an 'explanation' and an 'excuse,' and that such determinations depend on the facts of each case. Interpretation and reasoning: The Court was not persuaded that closure of the unit due to financial constraints justified losing track of proceedings already initiated, particularly where the petitioner had legal representation. It treated the asserted financial constraint as an 'excuse' rather than a plausible, acceptable explanation for: (i) belated filing of the appeal; (ii) failure to comply with the Tribunal's direction to file an affidavit explaining the 98-day delay; (iii) non-appearance leading to dismissal; and (iv) the seven-year delay in seeking restoration. The Court found no other plausible explanation forthcoming beyond financial constraint. Conclusion: Financial constraint/closure, without more, was held insufficient in the circumstances to justify restoration after seven years or to displace the Tribunal's discretionary decision. Issue 3: Effect of reliance on another Tribunal order condoning a long delay Legal framework (as considered by the Court): The Court evaluated comparability of precedents/factual parity for purposes of claiming similar discretionary relief on delay. Interpretation and reasoning: The Court distinguished the relied-upon Tribunal order condoning a delay of almost 2000 days on the basis of specific facts recorded there: non-service of the appellate order on the appellant, and deposit of a substantial portion of the recovered amount. Those features were treated as 'vital distinguishing features' absent in the present case, where dismissal followed failure to file the directed affidavit and prolonged inaction thereafter. Conclusion: The other condonation order did not assist the petitioner; it was held factually distinguishable and not a basis to overturn the impugned rejection of restoration.