Kishlay Foods (Pvt.) Ltd. vs Union of India

Heard Mr. K.N. Choudhury, the learned senior counsel appearing for the appellant. Also heard Mr. B. Sharma, the learned standing counsel for the Central Excise Department.

This appeal is filed under Section 35G of the Central Excise Act, 1944, to challenge the decision dated 7-5-2015 (page 46), whereby the Customs, Central Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata has dismissed the appeal and approved the earlier order passed by the Commissioner (Appeals) on 30-11-2011 (Annexure-D). It may be noted that the 1st Appellate Authority refused to consider the merit of the appeal, by treating the appeal to be time-barred.

The Addl. Commissioner of Central Excise, Guwahati, in his original order recorded on 30-7-2010 (Annexure-D), disallowed the Cenvat credit claimed by the petitioner on the ground that the assessee resorted to wilful misstatement and suppression of material information. Thus recovery of Rs. 17,26,595/- availed as Cenvat credit for the year 2003-04, 2004-05 and 2005-06 was ordered from the petitioner, by exercising powers under Section 11A(1) of the Central Excise Act read with Rule 14 of the Cenvat Credit Rules, 2004.

The learned senior counsel for the petitioner submits that the petitioner learnt of the original order only from the demand notice served upon them on 8-12-2010 (Annexure-D) and eventually, the order-in-original was received by the assessee only on 20-12-2010 and the appeal was filed by them on 1-3-2011 and this is within the permissible period, prescribed by Section 35 of the Central Excise Act. However the Appellate Authority opined that the original order was delivered by Regd. Post on 7-8-2010 and therefore the limitation period was counted from that date and on that basis, the appeal was declared to be barred by time and was not considered on merit.

While entertainment of appeal beyond the period of limitation can''t be allowed, the key question is the date of knowledge of the assessee. We find from the averments in ground A(2) of the appeal filed before the CESTAT that the order-in-original was never actually received by the assessee although the same may have been delivered to the security personnel, posted at the office gate. Because of such and other deficiencies of the concerned security agency, their contract with the company was terminated on 1-11-2011.

However the above aspect was not considered to count the period of limitation. But it is well known that no litigant gains anything by presenting a belated appeal and therefore the filing of the appeal ten days after the limitation period, may reasonably be on account of the non-delivery of the registered document, addressed to the petitioner.

What is important to notice here is that neither the 1st Appellate Authority nor the CESTAT had considered the merit of the appeal and both were dismissed by considering it to be time-barred. Bearing in mind the statement made in ground A(2) of the memo of appeal, we hold that computation of limitation period made by the 1st Appellate Authority was erroneous. Therefore we direct consideration of the appeal on merit.

For the above reasons, we set aside the order dated 7-5-2015 (page 46) of the CESTAT and also the order dated 30-11-2011 (Annexure-D) of the Commissioner (Appeals) and remand the case back to the Commissioner (Appeals), for his decision on merit.

With the above order, the appeal stands disposed of. No cost.