| SooperKanoon Citation | sooperkanoon.com/2763 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai |
| Decided On | Aug-04-1986 |
| Reported in | (1987)(13)LC545Tri(Mum.)bai |
| Appellant | Principal Collector of Customs |
| Respondent | thermax Private Ltd. |
Against Serial No. 3 of the prescribed proforma for filing of the appeal to the Tribunal it has been mentioned in the appeal that the Collector (Appeals) order was received by the appellant on 9-8-85. The Principal Collector's appeal there against was filed with the Tribunal on 6-3-86 which was beyond the normal period of three months prescribed under Section 129A(3) of the Customs Act. Hence the present application by the Principal Collector requesting for condonation of the delay in admission of his appeal.
2. Shri Sethna submitted that the copy of the Collector (Appeals) order was not served on the applicant Principal Collector as required under Section 128A(5) of the Customs Act as no copy of the order-in-appeal was endorsed to the Principal Collector of Customs. Hence there was no delay in presentation of the appeal. Shri Sethna submitted that this was a statutory requirement which had not been complied. As -an alternative argument he stated that the order dated 17-7-85 of the Collector (Appeals) was received by the Principal Collector on 9-8-85 and the Principal Collector's appeal there against was filed on 6-3-86.
There was delay which was due to the fact that the question of correct classification of the imported goods was under consideration of the Collector which was finally settled through the issue of the Public Notice No. 164 dated 19-11-85 relating to exemption from import duty on Power Projects falling under Heading 84.66 of the Customs Tariff Act 1975. Thereafter, some more time was taken in filing the appeal. This had been explained in the affidavit dated 27-6-86 of Shri Y.G. Parande, Dy Collector of Customs, Bombay. For the reasons mentioned in Shri Parande's affidavit, Shri Sethna submitted that the delay in filing of the appeal should be condoned. Shri Sethna observed that the appeal of the Principal Collector raised an important issue of classification of power plants imported into India The Order-in-Appeal of the Collector (Appeals) was erroneous in interpreting this exemption and if it was allowed to remain unchallenged, it would have wide revenue repercussions. Shri Sethna further clarified in response to the Bench's query that the Order-in-Appeal had a binding procedural value and hence it was necessary that an erroneous order should be set aside. In this behalf Shri Sethna drew our attention to Para 15 of Shri Parande's affidavit which contained the two fold request. Taking up the two fold contentions for detailed submissions, Shri Sethna argued that so far as the correct interpretation of Section 128A(5) was concerned, it could be said that a copy of the order of the Collector (Appeals) was not served on the Collector who was the applicant in the present case. This was a statutory requirement and the fact of service of the Order on Asstt. Collector, T.C.U. cannot be a substitute for fulfilling the legal requirements of Section 128A(5). Hence, Shri Sethna submitted that no proper notice was served on the Principal Collector as required under the law. In this behalf, Shri Sethna read Para 12 of Shri Parande's affidavit for elucidation. He argued that the service of the Order-in-Appeal on the Asstt. Collector, who was the original adjudicating officer on 9-8-85 could not be considered as service on the Collector as under the requirements of Section 128A(5). As regards the Respondent's contention before the Hon. Bombay High Court that the Principal Collector had issued a Standing Order on the subject under which his copy of the Appellate order was required to be sent to the Asstt. Collector, Tribunal Co-ordination Unit, Shri Sethna argued that the provisions of the Standing Order cannot be contrary to the provisions of the law. It was the duty of the Collector (Appeals) to serve a copy of the order in appeal on the Principal Collector and this was not done in the present case. Therefore, the Principal Collector remained ignorant of the order of the Collector (Appeals) and he could not file the appeal in time. As regards the alternate submission for condonation of the delay in presentation of the appeal, Shri Sethna stated that no responsible officer in the Customs House came to know of the Collector (Appeals) order. The Collector (Appeals) order was received by the clerk in 'K' Group on 9-8-85 and this was sent to the clerk in the Contract Section of the Custom House. The Order-in-Appeal was never put up before the Appraiser who could examine the same and put up to the Asstt. Collector and other higher officers. In this behalf, Shri Sethna referred to Para 8 of Shri Parande's affidavit.
Shri Sethna added that the Appraiser was the lowest responsible authority who could have taken notice of the Appellate order either for implementing it or for recommending an appeal being filed against it.
The responsible officers were therefore in dark till the respondents filed a petition before the Hon. Bombay High Court. Even the High Court in their minutes of Order dated 13-3-86 kept the issue open which would enable the Principal Collector to obtain a stay of the order of the Collector (Appeals) from the Tribunal. Shri Sethna referred also to the High Court's Minutes of Order dated 2-4-86 and 2-5-86. As per the aforesaid directions, the High Court had left the matter of the merits of the classification of the imported goods and other imports of identical nature to the decision of the Tribunal. Shri Sethna submitted that the Tribunal would not be able to decide on the merits of the case if the request for condonation of the delay was not allowed. In that case the stage for contesting the merits of the Appellate order would not arise and this would deny a valuable opportunity to the applicant.
Shri Sethna relied in this behalf on the judgment of the Bombay High Court reported in 1986 AIR BOM Page 246 which drew distinction between Public Institutions and private parties so far as limitation was concerned. Shri Sethna submitted that the ratio of the decision of the Bombay High Court would apply fully in the present case. Shri Sethna also relied on the Tribunal's decision in the case of Collector of Customs, Bombay v. Godrej Soaps Ltd. in the Order No. Misc. 89/85 C dated 10-4-85. Relying on these authorities, Shri Sethna prayed that the delay be condoned and the appeal be admitted. By way of information he added that the Standing Order requiring a copy of the order-in-appeal to be furnished to the Asst. Collector was withdrawn in January 1986. He undertook to furnish a copy of the original S.O. and the subsequent S.O. withdrawing the requirements of the earlier S.O. to the Tribunal.
3. On behalf of the Respondent, Advocate Shri Kotwal referred us to the endorsements in the order of the Collector (Appeals). As per these endorsements, one copy was meant for A.C./TCU, New Custom House, Bombay and the other copy for A.C./Group 'K'. Shri Kotwal contended that as per the Standing Order, the copy marked for A.C./TCU was meant to be served on the Collector of Customs. He further contended that this had actually been received by the Collector on 8-8-85 as mentioned by Kum.
R. Shakuntala, Asstt. Collector of Customs who had filed an affidavit on 10-3-86 in the High Court on behalf of the Union of India and Others. In this affidavit Kum. Shakuntala had further deposed that the appeal to the Tribunal could not be filed within three months i.e. by 7-11-85 due to over-loading of work and this was due to inadvertence.
As opposed to this reason for the delay in filing the appeal to the Tribunal, the prayer of Shri Prem Shankar for condonation of the delay stated that there was inordinate delay in filing the appeal which was regretted. It also added that the order of the Collector (Appeals) was unfortunately lost sight of and hence the appeal could not be filed in time. The matter was revived only on receipt of the Ministry's letter F.No. 346/67/85-TRU dated 19-7-85 asking for the Custom House views and practice with regard to the assessment of captive power plants and the issue of Custom House Public Notice No. 164 dated 19-11-85. Yet another different reason was mentioned in the unsworn affidavit of Shri H.M.Singh, Principal Collector of Customs. In all these affidavits and applications, the Collector, the Dy. Collector did not offer any explanation as to what happened to the copy of the order-in-appeal which was sent to the A.C./T.C.U. This was despite this Bench's direction to this effect dated 11-4-86 when the application was posted for hearing. Shri Kotwal further stated that in the form CA 3 prescribed for the presentation of the appeal against Serial No. 3, the date of communication of the Collector (Appeals) order was mentioned as 9-8-85. The Collector's authorised representative Shri Prem Shankar Asstt. Collector had requested for condonation of the delay. In this application, there was a note suggesting that the clerk had forgotten to put up the papers to the Appraiser. The issue of the Public Notice dated 19-11-85 had nothing to do with this appeal. The Bench had called for the Custom House file relating to the issue of the Public Notice and the Bench was satisfied in this matter. Shri Parande, Dy. Collector had filed an affidavit after the Bench's directions on 11-4-86 but this affidavit was nothing but a reproduction of the one filed by Shri H.M.Singh. No explanation was offered in these two affidavits as to what happened to the copy of the Collector (Appeals) order which was sent to Asstt. Collector, T.C.U. Shri Kotwal argued that the Tribunal Co-ordination Unit was a part of Collector's office and hence it could not be contended by him that the order was not served on his office.
The service of the order was a ministerial function and it was delegated by the Principal Collector to the Tribunal Co-ordination unit. In these circumstances, Shri H.M. Singh's affidavit was not reliable. Shri Kotwal referred us in this behalf to Para 6 of Shri H.M.Singh's affidavit. Shri Kotwal again mentioned the reason for the delay in filing the appeal as contained in Kum. Shakuntala's affidavit which was due to over-loading. This was in stark contrast to the reasons given by the Collector in his affidavit. Shri Kotwal submitted that the Collector's submissions in the affidavit had been contradicted by the affidavit of Shri Chandrashekar Padhye dated 11-4-86 vide Para 8. The Bench had perused the Custom House file and found that the appeal had no connection with the Ministry's letter or the Public Notice. Even after the issue of the Public Notice on 19-11-85, there was no explanation for the delay in presenting the appeal which was done on 6-3-86. After the Tribunal's order on 11-4-86, the respondents had filed a further affidavit dated 23-4-86 through Shri N.M. Contractor of the Respondent Co. Pointing to Paragraphs 3(c) of Shri Contractor's affidavit, Shri Kotwal stated that the respondent's advocates had addressed a letter to Shri R.L. Sethi, Asstt. Collector of Customs (Appeals) (Exhibit 'A' to the affidavit was a copy of this letter).
Through this letter, the respondents had inquired regarding the reason for furnishing a copy of the Appellate order to A.C./T.C.U. and what was required to be done with that copy. But the respondents had not received any reply from the Asstt. Collector. The respondents had also requested for the copies of the Standing Orders but these were not furnished to them. After the issue of the Appellate order dated 17-7-85 there was correspondence between the Bombay Custom House and the Pune Customs authorities. The Bombay Customs authorities would have conveyed the order of the Collector (Appeals) to the Pune Customs authorities.
This would be evident from the copies of Bs/Es. filed as Exhibits Cl and C2 with Shri N.M. Contractor's affidavit which showed that in the B/E, Exhibit Cl, the higher rate of duty was charged presumably because this was earlier to the date of the Appellate order while in the second B/E, (Exhibit C2), lower rate of duty was charged presumably as a consequence to the appellate order. The Principal Collector had not denied this fact. Apart from that, the respondents had filed an application to the Asstt. Collector of Customs, Poona for refund of excess duty paid by them. (Exhibit Dl to Shri Contractor's affidavit).
With another letter dated 25.9.85 addressed to the Asstt. Collector of Customs, Contract Cell, New Custom House, Bombay, M/s. Thermax Private Ltd. had furnished a copy of the Collector (Appeals) order. Even this letter dated 25-9-85 was within the limitation period of three months for preferring the appeal under Section 129A(3) of the Customs Act. The Custom House Agents of M/s. Thermax Private Ltd. had also addressed letters to the Asstt. Collector of Customs (Exhibits D5 and D6 to Shri Contractor's affidavit). A copy of the Collector (Appeals) order was also sent with C.H.A.'s letter dated 15-1-86. Shri Parande's affidavit was silent regarding the practice of dealing with the Appellate orders in the Tariff Co-ordination Unit. 'It was merely a repetition of Shri H.M. Singh's affidavit with the additional fact that the Standing Order had been withdrawn. In case the Collector's contention was that the Appellate order was not received by him, he should not have made a request for condonation of the delay. The alternate submission of the Collector that there was no service of the appellate order on him lender Section 128A(5) was merely an afterthought. Besides, there was no inconsistency between Section 128A(5) and the Standing Order in question. The S.O. concerned appointment of the Collector's agent for receiving the copy of the order of the Collector (Appeals). The law did not envisage personal service on the Collector. A clerk can receive the copy of the order. There was no explanation from any one regarding the copy sent to T.C.U. Only Shri Prem Shankar had made a candid admission that the matter was lost sight of. This was not a sufficient cause for the Tribunal to condone the long delay. As regards the copy of the order received in 'K' Group, the explanation was not satisfactory. Shri Kotwal therefore prayed that the application should be dismissed. He relied in this behalf on the Tribunal's decision in the case of Hindustan Lever Ltd. 1986 (24) ELT 639. He further relied on the decision in the case of Collector of Customs, Calcutta v. Calcutta Hardware Stores reported in 1985 (22) ELT 590 and also on the decision in the case of Mahant Metal Works 1986 (24) ELT Page 39. These decisions lay down that even though the applicants had good grounds in appeal, the delay in presentation of the appeal could not be condoned merely for this reason. As regards the applicant's reliance on the decision of the Bombay High Court in the case of State Bank of India reported in AIR 1986 BOM 246, Shri Kotwal contended that this decision did not cite any authority. On the other hand, the Supreme Court's decision in AIR 1972' SC 749 clearly lays down that "sufficient cause" for condoning the delay cannot be construed too liberally when Govt was a party. Shri Kotwal further relied on the decision of Patna High Court in AIR 1985 Patna 187 to say that wider application could not be given to the meaning of sufficient cause in this behalf. As regarding the applicant's submission that the Collector's order would have wide revenue repercussions Shri Kotwal submitted that the Notification No.133/85 Customs dated 19-4-85 had been amended and an explanation had been introduced thereunder by Notification No. 162/82 Cus. dated 1-5-86 and this explanation clarified that for the purpose of the Notification, power project would not include captive power plants etc.
Therefore, the contention of the applicant's advocate was not correct.
On these grounds Shri Kotwal prayed that the Principal Collector's application should be dismissed.
4. In reply, the learned SDR contended that the provisions of Section 128A(5) did not envisage setting up of an agent by the Collector to receive a copy of the order of the Collector (Appeals). The Supreme Court's decision relied on by the learned advocate Shri Kotwal was not inconsistent with the judgment of the Bombay High Court in the State Bank of India's case. Shri Pal cited the Supreme Court's decision reported in 1983 ECR 1556D to support his contention. The respondent's argument regarding their addressing the Asstt. Collector and filing the Bs/Es were not relevant for the purpose. This correspondence was earlier to the date of communication of the Collector (Appeals) order.
The Collector had complied with the Tribunal's order dated 4-11-86 which was that he should file an affidavit. But since the Collector was transferred he could not do so and the Dy. Collector Shri Parande had filed the affidavit. There was no negligence on the part of any officer in dealing with the order of the Collector (Appeals). The delay was for bonafide reasons and accordingly Shri Pal submitted that the delay should be condoned.
5. We have considered the submissions made on both the sides and also perused the Standing Orders submitted by the applicant. These Standing Orders are No. 6756 dated 25-6-81, No. 6772 dated 29-10-82, No. 6816 dated 25-1-85 and No. 6839 dated 24-1-86. A study of these orders shows that these had been issued keeping in view the provisions of Chapter XV of the Customs Act as incorporated by the Finance Act No. 2 of 1980. A special unit was created to co-ordinate the work relating to the filing of the appeals before the Appellate Tribunal under the S.O.No. 6756 dated 25-6-81 consisting of one Asstt. Collector, one Appraiser, one Examiner, one P.O. (S.G.), one stenographer, one U.D.C. and, one L.D.C.Pending bringing into force of the new Chapter XV of the Customs Act this unit was entrusted with the responsibility of considering reviews of the Appellate Collector's orders. It also contained the Collector's directions that with effect from 1-4-81 the Appellate Collector should serially number the Appellate orders and issue one copy to the adjudicating officer and another copy to the T.C.U. With the setting up of the Tribunal in October 1982, the provisions of the S.O. were amended by the S.O, No. 6772 dated 29-10-82. This incorporated the procedure for filing appeals to the Tribunal against the orders of Collectors of Customs (Appeals), Time limits were stipulated at each stage for handling the papers. But the statutory requirements of Section 128A(5) were lost sight of and the situation as prevailing before the setting up of the Tribunal continued to prevail. The lacuna in the. law was realised from the Ministry's telex F No. 78 dated 3-1-86 and this was rectified in the S.O. 6839 dated 24-1-86. Even though therefore the Standing Orders were a creation of the Collector, they were not in consonance with the requirements of Section 128A(5).
This resulted in the Collector being deprived of his statutory right of filing an appeal to the Tribunal. There is nothing in the Standing Orders which would show that the Tribunal Co-ordination Unit was set up as the agency by the Collector to receive the orders of the Collector of Customs (Appeals) on his behalf. Therefore, we are not inclined to accept the contention of Shri Kotwal that this unit acted as the agency of the Collector to receive the Appellate orders which was a ministerial function only. The statement of Kum. R. Shakuntala, Asstt.
Collector in her affidavit dated 10-3-86 before the Hon. High Court brings out that the order of the Collector (Appeals) was received by the respondents on 8-8-85. It is more appropriate to interpret this statement that the order of the Collector (Appeals) was received by the Adjudicating Asstt. Collector 'K' Group on 8-8-85 since Kum. Shakuntala was deposing on behalf of the respondents which included Union of India. Possibly, in this context, only the two dates of the receipt of the order namely 9-8-85 and 8-8-85 can be understood. The learned advocate of the respondents has drawn our attention to the correspondence which ensued between the importers, their agents c id the Custom House and Pune Customs authorities in the course of which copies of the Appellate order were furnished to the Asstt. Collector of Customs, Bombay twice. But there is nothing to show that these were brought to the notice of the Collector of Customs. It is therefore seen that the copy of the appellate order was never received by the Collector and therefore he could not take steps to file this appeal in time, which was his statutory right. In this view, we find that there is no delay in the presentation of this appeal and that the same is filed in time. As regards the alternate submission of the applicant's advocate Shri Sethna that the delay in the presentation of the appeal was caused due to circumstances beyond the control of the applicant, it is seen that the applicant never received a copy of the Collector (Appeals) order. This fact remains undisputed even though the delay in presentation of the appeal has been ascribed to different factors by different persons including the applicant himself. Shri Sethna has relied on the judgment of the Hon. Bombay High Court in the case of State Bank of India AIR 1986 BOM 246. In this judgment, the Bombay High Court drew a distinction between Public institutions like the State Bank of India and private parties. The relevant observation of the Hon.
Bombay High Court are reproduced below :- "What weighs with us in condoning the delay is the fact that public institutions like banks in the present case should not be treated on part with private individuals and institutions. The property of the public institutions belongs to the society in general and not to any individual or group of individuals in particular. Precisely for this reason, it appears that no particular individual is interested in safeguarding it. What belongs to all belongs to none in particular.
The affairs of public institutions are managed by paid employees, some of whom are interested only in their salaries. As long as their salaries and jobs are not threatened, they take the least care in safeguarding the interests of the institutions they serve. In the hierarchy of responsibility in the bureaucratic set up which invariably accompanies these institutions, the responsibility for the loss to the institution is hard to fix, and the employees take advantage of the same. What is more, with the growing corruption in varied forms, it is not difficult for interested parties to manage delays in taking legal proceedings against the debtors of these institutions. If the Courts take a strict view of the matter without taking into consideration these realities, they will unwittingly become parties to these malpractices. In the present case the stake is as high as Rs. 2,22,319/- and odd. In all cases where public institutions such as banks are involved, the stakes are bound to be high. It will not be difficult for unscrupulous persons to make a regular business out of deliberate delays in taking appropriate legal proceedings against the debtors. We do not suggest that the present is one such case. We are only uttering a word of caution against taking a mechanical view of the provisions of the law of limitation in such matters. As a matter of fact, the public institutions should not be hamstrung by any period of limitation. In the alternative there should be a special limitation provision for them. This however is a matter which the legislature has to tackle." Bearing in mind the foregoing remarks of the Hon. Bombay High Court, we realise that in the present case, the application for condoning the limitation period is filed by a public servant Again, as observed by the Hon. Bombay High Court, this may not be a case of any malpractice.
But we have to give due weight to the candid admission on the part of Shri Prem Kumar that the concerned officers of the Custom House lost sight of the Appellate order completely, thus depriving the Collector of his statutory right of appeal. The learned advocate Shri Kotwal on behalf of the respondents has urged that the Bombay High Court did not take into account the Supreme Court's decision in AIR 1972 SC 749 which laid down that "sufficient cause" could not be interpreted too liberally for the purpose of condoning the delay when Govt. was a party. As against this judgment, the learned SDR has relied on the ratio of the Supreme Court's decision reported in 1983 ECR 15.56D. The Supreme Court's decisions imply that each case has to be decided, more or less on its own merits. Therefore, we find considerable force in Shri Sethna's alternate plea for condonation of the delay in the presentation of the appeal, buttressed by the ratio of the decision of the Bombay High Court in the State Bank's case. Accordingly, we allow the application of the Collector, condone the delay in the presentation of his appeal, and direct that the appeal be admitted for hearing and disposal on merits in due course.