Commissioner of Central Excise, Delhi-I vs Hindustan Machines

There is an inordinate delay of 577 days in filing the present appeal challenging the Final Order dated 14th February 2013 of the Customs, Excise & Service Tax Appellate Tribunal (''CESTAT'') in Appeal Nos. E/1976 - 1984/2005 & E/2549-2551/2005 2013 (294) E.L.T. 43 (Tribunal). The application for condonation of delay is in three paragraphs. The only reason which is offered for the extraordinary delay is contained in para 2 which reads as under:

"2. That the certified copy of impugned CESTAT final order dated 14th February 2013 was received by the Appellant herein on 24th September 2014 after several written request to the Registrar, CESTAT and personal visits by the officers. Letters dated 4th September 2013, 16th September 2013 and 8th August 2014 were written to Registrar, CESTAT in this regard."

There is no other explanation offered for the delay. In the considered view of the Court, the above explanation is wholly inadequate.

The Supreme Court has in State of U.P. Thr. Exe. Engineer and Another Vs. Amar Nath Yadav, (2014) AIRSCW 1074 : (2014) 1 JT 494 : (2014) 1 RCR(Civil) 861 : (2014) 1 RCR(Criminal) 716 : (2014) 1 SCALE 304 : (2014) 2 SCC 422 reiterated its earlier decision in Office of The Chief Post Master General and Others Vs. Living Media India Ltd. and Another, AIR 2012 SC 1506 : (2012) 113 CLT 1066 : (2012) 174 CompCas 387 : (2012) 2 CTC 240 : (2012) 277 ELT 289 : (2012) 348 ITR 7 : (2012) 2 SCALE 782 : (2012) 3 SCC 563 : (2013) 1 SLJ 320 : (2012) 207 TAXMAN 163 : (2012) AIRSCW 1812 : (2012) 2 Supreme 244 where it was observed as under:

"In our view, it is the right time to inform all the Government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for process. The Government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for the Government Departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few."

Consequently, the Court is not inclined to condone the delay of 577 days in filing the present appeal. The application is dismissed.

Nevertheless learned counsel for the Appellant has been heard extensively on merits as well. The facts of the case have been set out in detail in the Order-in-Original No. 72 of 2005, dated 14th March 2005 of the Commissioner, Central Excise as well as in the impugned final order of the Third Member of the CESTAT to whom the matter was referred upon a difference of opinion between the Judicial Member (who held in favour of the Assessee) and the Technical Member (who held in favour of the Department).

The central question revolves around the availing of exemption by small - scale industry in terms of Notification No. 175/86-C.E., dated 1st March 1986. Admittedly, the brand name, ''Maharaja'' was in the name of Mr. Harish Kumar and his mother and his mother-in-law who are partners of Hindustan Machines (''HM'') which was manufacturing household goods. The impugned order has discussed in a great detail the inter-relationship between HM and its sister concerns which were also issued a show cause notice by the Department alleging that they had misutilised the exemption under the aforementioned notification and were involved in clandestine removal with a view to evading excise duty. The entire case of the Department hinged upon a single document stated to have recovered from one of the marketing companies namely Technocrat Marketing P. Ltd. (''TMPL''). It is seen from the impugned order the Third Member that the said document did not mention the nature of the goods, i.e., whether the goods were mixer-grinder, electric press or toasters which were being manufactured by HM and the other sister concerns. There was nothing in the said document or any other document recovered to indicate that these sales figures pertained to mixer-grinders manufactured by HM. No enquiry was made with any of the dealers about the nature of the goods purchased by them with reference to the said document. Also what the Department appears to have done is to apply arbitrarily the value of Rs. 900 which was the retail sale price of mixer-grinder to the figure of units sold and by that inferred that the total sales during 1987-88 was in excess of Rs. 1.89 crores.

In the absence of any evidence except the aforementioned single document, which had no description of the goods, the third member to whom the matter was referred was justified in concluding the said document purporting to be a sales statement "cannot be treated as containing the figures of sale of Maharaja brand mixer-grinders manufactured and cleared by HM during 1987". It was also rightly observed that while the document at best gives rise to doubts about the claim of HM regarding their eligibility for SSI exemption during 1987-88, it is insufficient, even on a preponderance of probabilities, to constitute proof for establishing the allegations of duty evasion against the assessee.

Having examined the documents placed on record, the opinion rendered by the members of the CESTAT as well as the Commissioner and having considered the submissions of learned counsel for the Appellant, the Court is not persuaded to interfere with the above factual finding or to conclude that the impugned order gives rise to any substantial question of law that requires to be decided by the Court. Consequently, there is no merit in the appeal. It is dismissed both on the grounds of delay as well as on merits. The pending application is also dismissed.