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Phoenix Plasts Company v. Commr. of C. Ex. (Appeals), Bangalore-I
Structured Summary of the Opinion
Factual and Procedural Background
The petitioner is a company liable to tax under the Central Excise Act, 1944. An Order-in-Original No. 27/2012 dated 2-4-2012 was passed by the Additional Commissioner of Central Excise, Bangalore-I Commissionerate. That order was sent by registered post with acknowledgement due on 2-5-2012 and the postal acknowledgement recorded receipt by the petitioner on 3-5-2012, bearing the petitioner's seal and signature.
The petitioner states that a security agency engaged by it failed to hand over the registered letter; the petitioner claims it became aware of the order only when Central Excise authorities sought to execute it. On 3-12-2012 the petitioner requested a copy of the order; the respondent supplied a copy and pointed out that the petitioner had received the order on 3-5-2012. The petitioner acknowledged receipt of that copy on 10-12-2012 and thereafter filed an appeal accompanied by an application to condone the delay.
The appellate authority initially returned the appeal without deciding the condonation application, prompting the petitioner to file W.P. No. 18255/2013. That writ petition was disposed of after the respondent's counsel submitted the condonation application would be considered. On representation and an opportunity of hearing, the Commissioner (Appeals) by order dated 25-6-2013 rejected the application to condone delay and held the appeal not maintainable. The petitioner challenged that decision in the present petition.
Legal Issues Presented
- Whether the Commissioner (Appeals) has jurisdiction to condone delay in filing an appeal under Section 35 of the Central Excise Act beyond the 30-day extension specifically provided by the statute (i.e., beyond 90 days from communication of the order).
- Whether the order-in-original dated 2-4-2012 was legally communicated to the petitioner on 3-5-2012 by service via registered post with acknowledgement due, such that the limitation periods under Section 35 begin to run from that date.
- Whether the petitioner’s factual assertion that its security agency failed to deliver the registered post can rebut the statutory presumption of service and thereby justify condonation beyond the statutory period.
Arguments of the Parties
Petitioner's Arguments
- The petitioner alleged that the security agency it engaged did not hand over the registered letter containing the Order-in-Original; as a result, the petitioner did not become aware of the order until Central Excise authorities sought to execute it.
- The petitioner relied on at least one reported decision (Texcellence Overseas v. Union of India) in support of its contention that the facts of its case justified condonation.
Respondent (Revenue)'s Arguments
- The respondent relied on the postal acknowledgement dated 3-5-2012 showing receipt by the petitioner and maintained that the order was communicated to the petitioner on that date.
- The respondent's representative accepted, during the writ proceedings, that the condonation application would be considered but ultimately supported the Commissioner (Appeals)'s power-limited view of Section 35 and the rejection of condonation beyond the statutory period.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Commissioner of Customs and Central Excise v. Hongo India (P) Limited (Three-Judge Bench, Supreme Court) | That under the Central Excise Act the appellate authority may condone delay only up to thirty days after the sixty-day preliminary limitation period; in the absence of a clause allowing further condonation, Section 5 of the Limitation Act is excluded. | The court relied on this authority to confirm that the legislative scheme permits condonation only within the specified thirty-day extension and excludes application of Section 5 of the Limitation Act for further extension. |
| Singh Enterprises v. Commissioner of Central Excise, Jamshedpur (Supreme Court) | Section 35 vests jurisdiction in the Commissioner (Appeals) to condone delay only within the period permissible under the statute and not beyond it. | The court cited this decision to reinforce that the Commissioner (Appeals) cannot extend limitation beyond the statutory cap prescribed by Section 35. |
| Texcellence Overseas v. Union of India (Gujarat) | Relied upon by the petitioner (as reported) for the proposition that in some facts condonation may be justified. | The court expressly held that the Texcellence decision, on the facts before it, was not a precedent applicable to the facts of the present case. |
Court's Reasoning and Analysis
The court proceeded on undisputed facts and anchored its analysis in the statutory text. It examined Section 35 of the Central Excise Act, 1944, which prescribes a 60-day period from the date of communication of an order to prefer an appeal and provides a first proviso permitting the Commissioner (Appeals), if satisfied that the appellant was prevented by sufficient cause, to allow presentation of the appeal within a further period of 30 days. The court emphasized that this 30-day extension is the outer limit of the statutory condonation power; the Commissioner (Appeals) has no authority to extend beyond those 30 days.
The court read the reference to "date of communication" in Section 35 in conjunction with Section 37C of the Act governing modes of service, which expressly lists service by registered post with acknowledgement due as a valid method. The court also relied on Section 27 of the General Clauses Act, 1897, to apply the statutory presumption that service by registered post is deemed effected at the time the letter would be delivered in the ordinary course, absent contrary proof.
Applying these principles to the facts, the court noted the petitioner's admission (via the postal acknowledgement bearing the petitioner's seal and signature) that the Order-in-Original was received on 3-5-2012. Given that admission, the court found the petitioner's contention that the security agency failed to hand over the registered letter insufficient to rebut the presumption of effective communication. Because the order was thus communicated on 3-5-2012, the statutory timeline under Section 35 commenced from that date and the petitioner failed to file its appeal within the statutorily permissible period (including the 30-day extension).
The court further held that the exclusion of Section 5 of the Limitation Act in the context of appeals under the Central Excise Act (as explained in the cited precedents) precluded any further condonation of delay beyond the statutory 30-day extension.
Holding and Implications
Holding: The court concluded that the Commissioner (Appeals) was fully justified in rejecting the application to condone delay and in declining to accept the appeal. The petition was dismissed as devoid of merit.
Implications: The direct consequence is that the petitioner's challenge to the Commissioner (Appeals)'s order (dated 25-6-2013) is unsuccessful and the appeal remains non-maintainable for want of timely filing within the limits prescribed by Section 35. The opinion underscores the restrictive scope of the Commissioner (Appeals)'s power to condone delay (limited to the 30-day extension) and confirms that, where service by registered post is established or admitted, the date of delivery governs limitation. The court did not purport to set any broader new precedent beyond applying established principles and prior authoritative decisions; its decision confirms and applies existing law on limitation and service in the Central Excise statutory framework.
Note: This summary is confined to the content and reasoning expressly set out in the provided opinion. No information beyond the opinion has been added.
[Order]. - Petitioner, a company incorporated under the Companies Act, liable to tax under the Central Excise Act, 1944, suffered an Order-in-Original No. 27/2012, dated 2-4-2012 of the Additional Commissioner of Central Excise. Bangalore-I Commissionerate, Bangalore, which when addressed to the petitioner by registered post acknowledgement due on 2-5-2012 was received by the petitioner on 3-5-2012 as recorded in the postal acknowledgement, containing the seal and signature of the petitioner. Petitioner alleging that the security agency engaged by the petitioner did not hand over the registered letter and it was only when the authorities of the Central Excise sought to execute the order, came to know of it, and accordingly addressed a letter dated 3-12-2012 requesting the respondent-authorities to furnish a copy of the said order. That letter, it is stated, was responded by a communication enclosing a copy of the order and inter alia pointing out that the petitioner had received the copy of the order-in-original on 3-5-2012. Petitioner acknowledged receipt of a copy of the order on 10-12-2012 and there afterwards preferred an appeal along with an application to condone the delay.
2. The appellate authority having returned the appeal without passing an order on the application for condonation of delay, led to the petitioner filing W.P. No. 18255/2013, which was disposed off recording the submission of the learned counsel for the respondent-Revenue that the petitioner’s application to condone the delay would be considered and orders passed in accordance with law. On the representation of the appeal memorandum along with the application to condone the delay, petitioner was extended an opportunity of hearing, where afterwards by order dated 25-6-2013, Annexure-”A”, the application was rejected and consequently it was held that the appeal was not maintainable. Hence, this petition.
3. Facts not being in dispute, it is relevant to note Section 35 of the Central Excise Act, 1944 (for short “Act”) which reads thus :-
“35. Appeals to Commissioner (Appeals). - (1) Any person aggrieved by any decision or order passed under this Act by a Central Excise Officer lower in rank than a Commissioner of Central Excise may appeal to the Commissioner of Central Excise (Appeals) [hereafter in this Chapter referred to as the Commissioner (Appeals) within sixty days from the date of the Communication to him or such decision or order :
Provided that the Commissioner (Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.
(1A) The Commissioner (Appeals) may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing :
Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.
(2) Every appeal under this Section shall be in the prescribed form and shall be verified in the prescribed manner.
Section 37C of the Act reads thus :-
“37C. Service of decisions, orders, summons, etc. - (1) Any decision or order passed or any summons or notice issued under this Act or the rules made thereunder, shall be served,-
(a) by tendering the decision, order, summons or notice, or sending it by registered post with acknowledgement due, to the person for whom it is intended or his authorized agent, if any;
(b) if the decision, order, summons or notice cannot be served in the manner provided in clause (a), by affixing a copy thereof, to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case may be, is intended;
(c) if the decision, order, summons or notice cannot be served in the manner provided in clauses (a) and (b), by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice.
(2) Every decision or order passed or any summons or notice issued under this Act or the rules made thereunder, shall be deemed to have been served on the date on which the decision, order, summons or notice is tendered or delivered by post or a copy thereof is affixed in the manner provided in sub-section (1).”
4. There can be no dispute that the appellate authority is a creature of the Statute vested with jurisdiction to condone the delay but not beyond the period permissible under the Statute. The period up to which the prayer for condonation can be accepted is statutorily provided. The first proviso to Section 35 makes the position clear that the appeal has to be preferred within sixty days from the date of communication to the assessee of the decision or order. However, if the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, can allow it to be presented within a further period of thirty days. In other words, the petitioner should have filed the appeal within sixty days and in terms of the proviso extended by another thirty days. Under Section 35, the Commissioner has no authority or jurisdiction to allow the appeal to be presented beyond the period of thirty days. The Legislature having intended the appellate authority to entertain the appeal by condoning the delay only up to thirty days after expiry of sixty days period after preferring the appeal, there is complete exclusion to the application of Section 5 of the Limitation Act.
5. The expression in Section 34 of the Act “from the date of communication of said order” must be read in conjunction with Section 37C of the Act, since, service of decisions or orders or summons is by special modes, one of which is, sending it by registered post with acknowledgment due to the person to whom it is intended or to his authorized agent, if any. It is useful to note Section 27 of the General Clauses Act, 1897 which reads thus :-
“27. Meaning of service by post. - Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression “serve” or either of the expressions “give” or “send” or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.”
If regard is had to the aforesaid statutory provisions, there can be no more doubt that the petitioner having admitted to the fact of having received the order-in-original Annexure-”C” on 3-5-2012, duly acknowledged by affixing its seal and signature on the postal acknowledgement it cannot but be said that the order-in-original dated 2-4-2012 was communicated to the petitioner on 3-5-2012. It is no doubt true that the factum of communication of the order by registered post acknowledgement due is a rebuttal presumption. Nevertheless in the light of the admission of the fact that the order-in-original Annexure-”C” was served on the petitioner on 3-5-2012 the submission of the petitioner that the security agency engaged by it did not make available the order-in-original, though received by registered post acknowledgment due, is not a formidable legal ground to contend that the petitioner was not communicated with the order-in-original, Annexure-”C”.
6. The failure to file an appeal within the time stipulated under Section 35 of the Act, did not entitle the petitioner to condonation of delay of the period beyond the period prescribed under the Statute.
7. In Commissioner of Customs and Central Excise v. Hongo India (P) Limited and (S.C.)] a three Judge Bench of the Apex Court having regard to the provision for filing an appeal under the Central Excise Act, 1944, observed that the Legislature intended the appellate authority to entertain the appeal by condoning the delay up to only thirty days after expiry of sixth days which is the preliminary limitation period for preferring an appeal. In addition, it was observed that in the absence of any Clause to condone the delay by showing sufficient cause, there is complete exclusion of Section 5 of the Limitation Act.
8. In Singh Enterprises v. The Commissioner of Central Excise, Jamshedpur (S.C.)], the Supreme Court observed that Section 35 of the Central Excise Act, 1944 vested a jurisdiction in the Commissioner of Central Excise (Appeal) to condone the delay within the period permissible under the statute and not beyond that.
9. Though the learned counsel for the petitioner places reliance upon the reported opinion in Texcellence Overseas v. Union of India [ (Guj.)] I am afraid in the facts and circumstances obtaining therein, it is not a precedent which could be applied to the facts of this case.
10. In the facts of the present case, the explanation offered by the petitioner that the security agency engaged by it did not make available the order-in-original, Annexure-”C’: though received it on 3-5-2012 is unacceptable. In my opinion, the Commissioner (Appeals) was fully justified in rejecting the application to condone the delay and consequently declining to accept the appeal, by the order impugned.
11. Petition devoid of merit is rejected.
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