Time spent in pursuing remedy before wrong forum is excludible in determining period of limitation

Cairn Energy India Pvt. Ltd. (the Assessee) was engaged in manufacturer of Excisable goods, clearance of which required payment of Excise duty and cess. The Adjudication Authority vide its Order dated March 23, 2006, raised the demand of Excise duty amounting to Rs. 19,96,410/- along with interest under Section 11AB of the Central Excise Act, 1944. The copy of the said order was furnished to the Assessee on May 9, 2006 against which the Assessee filed an appeal before the Hon’ble Tribunal. The Hon’ble Tribunal vide its Order dated September 28, 2006 rejected the appeal on the ground that the appeal should have been filed before the Commissioner (Appeals).

Thereafter, the Assessee filed an appeal before the Commissioner (Appeals) on October 9, 2006 which was rejected on the ground of time barred. Being aggrieved, the Assessee filed an appeal before the Hon’ble Tribunal.

The Hon’ble Tribunal allowed the appeal in favour of the Assessee and held that the he was entitled to the benefit of Section 14 of the Limitation Act, 1963 (the Limitation Act) against which the Department filed an appeal before the Hon’ble High Court of Andhra Pradesh.

The Hon’ble High Court of Andhra Pradesh relied upon the following judgments of the Hon’ble Apex Court:

• Singh Enterprises CCE [(2008) 12 STT 21]
• CC&CE Hongo India (P.) Ltd. [2009 taxmann.com 547 (SC)] and
• Amchong Tea Estate  Union of India [(2010) 1 taxmann.com 789 (SC)]

And held that in terms of Section 29 of Limitation Act, provisions of the Limitation Act are applicable, except when specifically excluded and as per Section 14 ibid, time spent in pursuing remedy bona fidely before wrong forum is excludible. It was further held by the Hon’ble High Court that there is difference between ‘condonation of delay’ and ‘exclusion of period’. The condonation of delay is in the discretion of the Court or Forum, whereas exclusion of time under Section 14 of the Limitation Act is a mandate under law,without leaving any scope for subjectivity. Hence, the appeal filed before Commissioner (Appeals) was within time-limit.