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Commissioner of Central Excise, Delhi-III, Gurgaon v. M/s Kap Cones, Udyog Vihar, Gurgaon

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 5432 of 2015)Decided 20 Jul 2015
Civil Appeal No. 5432 of 2015
Justice Dipak Misra · Justice Prafulla C. Pant

Background

The respondent, a manufacturer of paper cones, was found by the Commissioner to have wrongly availed Cenvat credit and was penalised. The departmental Committee of Chief Commissioners reviewed this order and directed an appeal to the Tribunal, but did so 8 days after the 3-month limitation period for such review had expired. The Tribunal held it had no power to condone this delay in the review stage itself, and the Punjab & Haryana High Court agreed, dismissing the Revenue's appeal.

Decision Breakdown

The Supreme Court examined the legislative history of Section 35E of the Central Excise Act and held that, after the 2008 amendment equated the review-committee's three-month period with the ordinary appeal period under Section 35B, the Tribunal's power to condone delay under Section 35B(5) extends to delay occurring at the review-committee stage as well, not just to delay in filing the appeal itself. The Court approved the Full Bench ruling in CCE v. Monnet Ispat & Energy Ltd. on this point and distinguished the earlier three-Judge decision in M.M. Rubber Co., which was decided under a materially different, older version of the provision. The appeal was allowed, the Tribunal's order set aside, and the matter remanded to the Tribunal to decide the delay-condonation application on its own merits.

Lesson Learnt

A government department's right to pursue an appeal against a tax order is not automatically lost merely because its internal review committee took a few days longer than the statutory time limit: tribunals do have the power to excuse such delay for sufficient cause, just as they can for an ordinary assessee's appeal.

Official source (sci.gov.in)View Judgment (PDF)

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