Case Law Details
Commissioner of Customs Vs Dalmia Cement (Bharat) Ltd (CESTAT Chennai)
Introduction: In the recent case involving the Commissioner of Customs and Dalmia Cement (Bharat) Ltd, the Chennai branch of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled in favor of Dalmia Cement. The judgment focused on the Department’s failure to review orders timely, resulting in the approval of a refund claim.
Analysis: Dalmia Cement had initially filed refund claims which were sanctioned by the original authority. The Customs Department, disagreeing with this sanction, filed appeals against the decision. However, the Commissioner (Appeals) highlighted that these appeals were time-barred due to delays in passing the review orders.
Despite arguments from the Customs Department, the Commissioner (Appeals) maintained that the Department had not adhered to the timelines stipulated under Section 129 D. This section mandates that review orders must be passed within three months from the communication date of the original decision. Following this, any appeal against the review order should be lodged within a month from its communication. The Commissioner (Appeals) observed significant delays, making the appeals time-barred, and with no provision for condonation in cases filed under Section 129D, all the appeals were rejected.
It’s also worth noting that a similar case had been presented before the Tribunal earlier this year, where once again, the Commissioner (Appeals)’ observations were upheld, marking a consistency in legal interpretation.
Conclusion: CESTAT Chennai’s decision to uphold the refund claim for Dalmia Cement sets a significant precedent. It reinforces the importance of adhering to stipulated timelines for reviews and appeals, ensuring that procedural lapses don’t inadvertently penalize entities. The ruling highlights the importance of timely legal processes and emphasizes the need for departments to ensure procedural compliance to avoid such pitfalls in the future.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The issue in all these appeals being the same they were heard together and are disposed of by this common order.
2. Brief facts are that the respondents herein had filed refund claims and the same were sanctioned by the original authority. Against such order of sanctioning the refund claim, the Department filed appeals before the Commissioner (Appeals). However, it was noted by the Commissioner (Appeals) that as there is delay in passing the review order, the appeals are time-barred. Aggrieved, the Department has filed the above appeals.
3. The Ld. Authorized Representative Shri Harendra Singh Pal reiterated the grounds of the appeal.
4. None for the respondents.
5. The appeals were taken up for disposal after hearing the Ld. Authorised Representative and perusal of records. In the impugned order, the Commissioner (Appeals) has given the table wherein the details of the delay have been recorded. Batch of 40 appeals filed by the Department were considered together by the Commissioner (Appeals). In last column of the table, the Commissioner (Appeals) has noted the delay in filing of each appeal. In the present appeals, there is delay in passing the review order. As per Subsection (3) of Section 129 D, the review order has to be passed within a period of three months from the date of communication of the decision of the adjudicating authority. In the grounds of appeal, it is stated that the period of three months has to be computed from the date of receipt of the Order-in-Original and the Commissioner (Appeals) has erred in computing the delay from the date of order. The dates on which the order was received before the reviewing authority is also seen mentioned in the grounds of appeal. However, the Commissioner (Appeals) has noted that the Department has not put forward the date of receipt of order before the review authority. We have to say that the Commissioner (Appeals) has taken the effort to tabulate the delay in all these 40 appeals. It is also noted that the Department did not make any representation as to the date on which the reviewing authority received the order passed by the adjudicating authority. In such circumstances, we cannot accept the contention of the Department that the order was received by the reviewing authority on a much later date and that the review order is passed within time. The Department has not been able give any plausible explanation as to why they did not bring to the notice of the Commissioner (Appeals) the date of receiving adjudication order if they had knowledge of the same. We find no reasons to dis-believe the discussions made by the Commissioner (Appeals) which reads as under:-
“4. Before going into the merits of the individual cases it is seen that the procedures laid down under Section 129 D ibid was not followed. According to 129D (3)&(4) reads as follows::
“[(3) Every order under sub-section (1) or sub-section (2), as the case may be, shall be made within a period of three months from the date of communication of the decision or order of the adjudicating authority.]
(4) Where in pursuance of an order under sub-section (1) or subsection (2), the adjudicating authority or any officer of customs authorized in this behalf by the [Commissioner of Customs], makes an application to the Appellate Tribunal or the [Commissioner (Appeals) within a period of [one month] from the date of communication of the order under sub-section (1) or sub-section (2) to the adjudicating authority, such application shall be heard by the Appellate Tribunal or the [Commissioner (Appeals), as the case may be, as if such application were an appeal made against the decision or order of the adjudicating authority and the provisions of this Act regarding appeals, including the provisions of sub-section (4) of section 129A shall, so far as may be, apply to such application.”
From the above, it is clear that the review orders should be passed with in three months from the date of communication of the O-In-O and the appeal under Section 129D should be made with in a further period of one month from the date of communication of the review order. It is seen from the table above that, in many cases the review order itself was seemed to be passed after the stipulated period of three months from the date of communication of the O-In-O. However, the mandatory requirement of filing an appeal within 1 month was also not followed in cases as it is evident from the above table. There is no condonation provision for the Commissioner (Appeals) for the appeals filed under Section 129D.
5. In view of the above, without going into the merits of the case, I reject all the 40 departmental appeals as time barred.”
7. The Tribunal in similar case had disposed the appeals vide Final Order No.40203-40205/2023 dated 27.03.2023 wherein the impugned order passed by the Commissioner (Appeals) was upheld holding that there were no grounds to disbelieve the observations made by the Commissioner (Appeals).
8. In the result, the impugned orders are sustained. The appeals are dismissed.
(Order pronounced in open court on 16.08.2023)
