M/S. CARBON & CHEMICALS (I) LIMITED vs THE COMMISSIONER OF CENTRAL EXCISE

The appellant is aggrieved with the order passed at Annexure-D by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal

Bench at Bangalore [for brevity ""CESTAT""]. The CESTAT, by the said order, refused to restore an appeal filed by the appellant. The issue which

was the subject matter of the appeal, originally filed by the appellant, was with respect to MODVAT credit. The appellant was granted MODVAT

credit, which order was appealed by the Department as per the provisions of the Central Excise Act, 1944 [for brevity ""CE Act""], in which the

Commissioner (Appeals) had reversed the credit granted. An appeal, numbered as A.No.E/2100/97, was filed by the appellant before the

CESTAT, in which Annexure-A stay order was passed restricting the pre-deposit to Rs.60,000/-.

Subsequently, the provisions for granting MODVAT credit as available in the Central Excise Rules was deleted and a separate rules with a

different terminology was provided, i.e., CENVAT Credit Rules. There was no saving clause with respect to continuance of the proceedings as

per the earlier Rules. Hence, the CESTAT by Annexure-B order dated 08.03.2001, rejected a number of appeals filed under the MODVAT

Credit Rules for reason of there being no saving clause enabling the continuance of such proceedings. Three of assessee''s appeals were rejected,

as is seen from Annexure-D order produced.

The CE Act provided a saving clause, being Section 38A, introduced in 2001 with effect from 11.05.2001. Section 35C(2) provided for a four

year limitation period in which the Appellate Tribunal could rectify any mistake apparent from the record or amend the order passed under sub-

section (1). The assessee, hence, had time upto 07.03.2005 to file an application to restore the appeal by pointing out introduction of the saving

clause. Section 35C(2) was amended by Act 20 of 2002 with effect from 11.05.2002, reducing the four year period to six months. The saving

clause came into effect after Annexure-B order was passed. The argument of the appellant is that since at the time of passing Annexure-B order

there was a four year period available to file an application to correct the mistake apparent on the face of the record, the appellant had an accrued

right insofar as filing the application within the limitation period so provided.

We are not ready to accept the aforesaid contention, since there is no right accrued on the appellant insofar as the limitation provided in the

statute at the time of the original order. When the period of limitation is reduced to the prejudice of the litigant, then necessarily an application could

be filed within a reasonable time from the date of such amendment, which definitely could be considered by the Tribunal. But there can be no

contention raised that dehors the amendment reducing the limitation period the orders issued earlier should be governed under the pre-amended

provisions.

In the present case, the appeal was rejected on 08.03.2001. The saving clause came into force two months after the appeal was rejected. The

amendment was brought into Section 35C(2) in 2002 with effect from 11.05.2002, i.e., more than one year after the appeal was rejected. The

appellant even then waited for another two years before an application was filed, which was produced at Annexure-C dated 19.01.2004. It is also

pertinent that there were three appeals dismissed by the CESTAT as per Annexure-B, as seen from the cause titles of a number of appeals

extracted in the order. The appellant diligently filed two appeals and left out the appeal in the present proceedings. The appellant is found to have

not diligently prosecuted the appeal in the present proceedings. In such circumstance, this Court does not find any reason to interfere with

Annexure-D order.

The Central Excise Appeal would stand dismissed. No costs.