JUDGMENT
S.B. Sinha, C.J.
1. This appeal under Section 268-A of the Income-tax Act has been filed,
raising the following questions of law:
Whether in the facts and circumstances of the case:-
1. Tribunal is correct in holding that two pleas
mentioned in Ground 2 and Grounds 5 to 9 in the
Applicants appeal before it were not pressed by the
Applicant (Para 6 & 7 of the Tribunal’s order
M/80/01/NB(SM).)
2. Appeal before the Commissioner (Appeals) should
be treated to have been filed in time treating the date
16/12/97 as the date of filing the same as it was filed
in the office of the Assistant Commissioner Central
Excise, Div-V: an officer sub-ordinate to
Commissioner (Appeals) in so far as appeals are
concerned – on that date. (Para 2 of Tribunals final
order No. A/2180/00-NB(SM) dt. 17/10/2000).
3. The question on merits regarding correctness of
availing the modvat credit on capital goods by the
applicant was validly before the Tribunal, on the
basis of the doctrine of merger, and the Tribunal was
duty bound to deal with this question in the appeal
before it, even if the appeal before Commissioner
(Appeals) was treated to be barred by time as has
been held by the authorities below. (Para 4 of
Tribunal’s order No. M/80/01 dt. 09/03/2001 and
para 2 of Tribunal’s final order No. A/2180/00-NB
(SM) dt. 17/10/2000).
4. Tribunal has the power to recall its final order no.
A/2180/00-NB (SM) dt. 17/10/2000 and pass a fresh
order, in exercise of its power under Section 35c(2)
to rectify the mistakes apparent from the record,
since the mistakes are to go to the root of the case
and the rectification of the mistake can not be made
otherwise than by recalling its earlier order.
5. In other words, whether the law laid down by Larger
Bench of the Tribunal in 2000 (118) ELT 77-Para 9
is valid in all facts and circumstances including the
facts and circumstances of this case (para 7 and 8 of
Tribunal’s Order M/80/01 NB (SM) dt. 09/03/2001.
Signature of Advocate
(P.C. Jain)”
The fact of the matter, which is required to be noticed, is as follows:
2. The applicants purchased one injection-moulding machine (Windsor
Model) with screw assembly and tool kits from M/s DGP Windsor India Ltd., Bombay.
The goods were cleared under cover of invoice No. 0189/95 dated 18.06.95. The goods
were consigned through M/s Chaudhary Roadlines Corporation vide their consignment
note dated 18/06/95. Due to some trouble en route, the transporter delivered the goods in
two parts. Main machine was delivered on 30/06/95 but the screw assembly was
delivered a few days earlier. The Applicant submitted a declaration under Rule 57 T to
the Assistant Commissioner with intimation to the Superintendent Central Excise of the
concerned range of this effect. Applicant also requested for condensation of delay in
submission of the declaration as a part of the goods had been received earlier. Due to
clerical mistake, the date of receipt of capital goods bathed in the declaration and intimation
was indicated as 18/06/1995, which was in fact the date of invoice. The capital goods
were duly accounted for in RG23C Part-I and credit of duty was taken on 30/06/95 to the
tune of Rs. 147000/- in RG23C Part-II. Range Superintendent issued a demand show-cause
notice bearing C. No. CE/20/D/RMC/R-26/95/1397 dated 11/10/95 proposing to
deny and recover the modvat credit of Rs. 147000/- alleging late submission of the
prescribed declaration on 30/06/95 where in the capital goods had been declared to have
been received on 18/06/1995. Applicants submitted a reply to the above demand show-cause
notice on 16/11/1995 explaining that inadvertently the date of the invoice had been
mentioned as the date of receipt of goods. Thus the applicants requested for dropping the
show-cause notice. Applicant’s submission was not accepted by the Assistant
Commissioner Central Excise who confirmed the demand of Rs. 1,47,000/- and
directed recovery of the said amount. He also imposed a penalty of Rs. 20000/- vide his
order-in-original No. 87/97-98 dated 17/10/1997. Aggrieved against the above order-in-original
dated 17/10/1997, Applicant filed on 16/12/1997 an appel, addressed to the
Commissioner (Appeals), New Delhi inadvertently in the office of the same Assistant
Commissioner Central Excise who had passed the order-in-original appealed against.
Aforesaid mistake was committed by the Peon-cum-Record Keeper of the Applicants
who submitted an affidavit dated 12/10/2000 to this effect. Although the Assistant
Commissioner Central Excise either ought to have returned the said appeal to the
applicants or forwarded it to the office of the Commissioner (Appeals), New Delhi, yet he
did not do anything and just slept over it. Applicants became aware of the said mistake
around October 1998 when they intended to avail of the Kar Vivad Samadhan (KVS)
Scheme. Hence the applicants sent a copy of the said appeal to the Commissioner
(Appeals) office on 05/11/1998. Commissioner (Appeals) without going into merits of
the appeal dismissed the same as time barred because it had been filed well beyond the
period of delay of three months up to which the Commissioner (Appeals) had the power to
condone the delay after the expiry of normal period of three months for filing the appeal.
Aggrieved against the said order-in-appeal dated 01/03/2000 Applicants filed an appeal
to the Tribunal, New Delhi. As would be observed from the grounds in the appeal before
the Tribunal, Applicants mae three basic pleadings, namely,
[i]. Appeal before Commissioner (Appeals) be deemed to have
been filed on 16/12/1997 well within time of three months of
of date of communication of Assistant Commissioner order-in-original
dt. 17/10/1997, although this appeal was wrongly
filed in the office of the same Assistant Commissioner on that
date (Ground No. 2)
[ii]. If the date of filing appeal in Commissioner (Appeals) office
is taken as 05/11/1998, delay in filing appeal in the said office
be condoned by the Tribunal (Ground No. 3).
[iii]. On merits, A.C.’s order is not sustainable (Ground No. 5 to 9).
3. Tribunal vide its final order No. A/2180/00-NB(SM) dated 17/10/2000
dismissed the appeal of the applicant upholding the finding of the Commissioner that
this was barred by time. Commissioner (Appeals) could not condone the delay because
the appeal was filed well beyond the power of condensation of delay of three months. It
held that Tribunal had no powers to condone the delay. Tribunal’s said order dated
17/10/2000 was received by the Applicants on 19/12/2000. It is thus apparent that the
Tribunal did not deal with the pleadings stated at sub-paras (i) and (iii) in para 13 above.
Not dealing with the pleas made in the appeal being a mistake apparent from the record in
the Tribunal’s order, Applicants filed an application for Rectification of Mistakes (ROM)
apparent from the record under Section 35C of the Central Excise Act, 1944 (1 of 1944) but without
success. ROM application has been dismissed on the erroneous ground that the said two
pleadings -stated at (i) and (iii) in para 13 above were not pressed by the Consultant
before the Tribunal during the course of personal hearing of the appeal on 17/10/2000.
This finding of the Ld Member of the Tribunal is ex facie unsustainable because the
Tribunal’s final order No. A/2180/00-NB(SM) which records that only the plea of
condensation of delay in filing the appeal before Commissioner (Appeals) was made and
no other plea raised in the memo of Appeal before the Tribunal was pressed. A close
reading of para 2 of Tribunal’s final order No. A/2180/00-NB(SM), as reproduced in para
6 of its Miscellaneous Order No. M/80/2001-NB (SM), also reveals that the said two
pleading were also pressed as is apparent from a part of last sentence “We may be heard
on merits considering the same as filed in time.” Nevertheless, an affidavit dated
14/04/2001 of the Consultant Shri C.S. Gupta, who argued the appeal of the applicants
before the Tribunal clearly states that all the pleadings mae in the memo of appeal
before the Tribunal were pressed. Tribunal has found in para 7 of its Miscellaneous
Order No. M/80/01/NB (SM) dated 09/03/2001 that a final order in an appeal passed by a
duly constituted Bench cannot recall an order passed or issued :- “It is further held:-
“Under the cover of rectification of mistake, this Tribunal cannot exercise any power to
recall an order validly passed”. Quoting the above observation from a judgment of
Larger Bench (comprising three member) of the Tribunal in the case of S/Shri Dinkar
Khindria and Dinesh Khindria reported in 2000 (38) RLT 442 (Cegat-L.B.) [=2000
(118) ELT 77], Tribunal, New Delhi appears to hold that even if a plea going to the root
of the case is made and admittedly not dealt with by the Tribunal, it can not recall its
earlier order to rectify the mistake in the earlier order even if recall is the only method by
which mistake apparent from the record can be rectified.
4. The learned counsel appearing on behalf of the petitioner, Mr. P.C. Jain
would submit that although the Commissioner dismissed the appeal on the ground that
the same was barred by limitation, having regard to the doctrine of merger, the Income-
tax Appellate Tribunal ought to have considered the appeal on merit.
5. It is not in dispute that in terms of provisions of the Central Excise Act,
the appellate Commissioner had the jurisdiction to condone the delay for a period of three
months only.
6. The learned counsel would further contend that an appeal, although
dismissed as being barred by limitation, would still be an appeal as such, a further
appeal before the Tribunal was maintainable which ought to have been decided on merits.
The learned counsel would contend that an appeal filed before a wrong forum should be
treated to have been filed on the day on which it was presented despite the fact that the
same had been presented before the right forum on a latter occasion. Reliance in this
connection has been placed on Mela Ram and Sons v. Commissioner of Income-tax,
Punjab, (1956) 29 ITR 607, Mark Auto Industries v. CCE, New Delhi, 2000(41) RLT
756 (CEGAT) and V.M. Salgaocar & Bros. P. Ltd. v. Commissioner of Income Tax etc.,
2000(38) RLT 619.
7. In Kunhayammed and Ors. State of Kerala and Anr. , it
has been held that when a special leave is dismissed at the threshold without assigning
any reason, neither the principles of res judicata nor the doctrine of merger shall apply.
When a special leave petition is dismissed by a speaking or reasoned order, still then, the
doctrine of merger shall not apply but rule of discipline and Article 141 would be
attracted or where the leave is granted and appeal is dismissed without reasons, merger
results. In Kunhayammed & Ors. (Supra), it has been held in relation to the doctrine of
merger, as under:
“7. The doctrine of merger is neither a doctrine of
constitutional law nor a doctrine statutorily recognized. It is
a common law doctrine founded on principles of propriety
in the hierarchy of justice delivery system. On more
occasions than one this Court had an opportunity of dealing
with the doctrine of merger. It would be advisable to trace
and set out the judicial opinion of this Court as it has
progressed through the times.”
Further in para 32, it was held:
“32. It may be that in spite of having grated leave to
appeal, the Court may dismiss the appeal on such grounds as
may have provided foundation for refusing the grant at the
earlier state. But that will be a dismissal of appel. The
decision of this Court would result in superseding the
decision under appeal attracting doctrine of merger. But if
the same reasons had prevailed with this Court for refusing
leave to appeal, the order would not have been an appellate
order but only an order refusing to grant leave to appeal.”
8. Having heard the learned counsel for the parties, we are of the opinion that
the case of this nature, doctrine of merger, as such, has no application.
9. An appeal can be treated to be a regular appeal only when the delay in
filing the appeal is condoned. In the instant case, the limitation in preferring the appeal
had not and could not be condoned.
10. It is not a case where the appellant herein could take recourse to the
provisions of Section 14 of the Limitation Act, 1963, provisions of which have no
application to the present case. The appeal were filed before the Central Excise and Salt
Commissioner, and the CEGAT, which are not courts.
11. Had the Limitation Act, 1963 been applicable, the appellant could have
taken recourse to Section 14 thereof. It is now well settled that where Section 14 of the
Act cannot be taken recourse to, such a plea can be raised in an application for
condensation of delay as provided for in the statute, which may be akin to the provisions
contained in Section 5 of Limitation Act. In the instant case, the jurisdiction of the
Commissioner, to condone the delay in filing the appeal was restricted to three months
only. Thus, as the appellant had withdrawn the memo of appeal from the Assistant
Commissioner, CEGAT, he could not have exercised his jurisdiction to condone the
delay in filing the appeal beyond a period of three months.
12. The decisions relied upon by the learned counsel for the applicant have no
application in the facts and circumstances of this case. In Mela Ram and Sons v.
Commissioner of Income-tax, Punjab (supra), the question which arose for consideration
was as follows:
“Whether in the circumstances of the case appeals
lay to the Tribunal against order of the Appellate Assistant
Commissioner dismissing the appeal against the
assessments for the years 1945-1946 and 1946-1947 in
liming.”
13. It was with a view to answering the said question that it was held that an
appeal presented out of time is also an appeal and the order dismissing it as time barred is
one passed in appeal.
14. The provision for preferring an appeal in terms of Section 33(1) of the Act
was:
“any assessed objecting to an order passed by an
Appellate Assistant Commissioner under Section 28 or
Section 31 may appeal to the Appellate Tribunal within sixty
days of the date on which such order is communicated to
him.”
15. Thus, any order passed by the Assistant Commissioner, CEGAT could be
appealed against to the Appellate Tribunal. Having regard to the afore-mentioned
provisions, the apex court held that:
“…There is thus abundant authority for the position
that Section 31 should be liberally construed so as to include
not only orders passed on a consideration of the merits of
the assessment but also orders which dispose of the appeal
on preliminary issues, such as limitation and the like.”
16. In Collector of C.Ex., Bhubaneswar v. Jayshree Chemicals Ltd., 1997(96)
ELT 625, the CEGAT as regards the claim of refund, held that when application had been
filed before a wrong officer, it was his duty to return the same immediately so that it
could be presented before the competent authority without delay. No exception to the
afore-mentioned proposition can be taken. but in the instant case, by reason of inaction
on the part of the appropriate authority, Commissioner of Appeals could not have
condoned the delay beyond the period of three months, in relation whereto he had no
jurisdiction.
17. The decision in Mark Auto Industries v. CCE, New Delhi (supra) was
counter to the contention of the learned counsel for the appellant. In para 8, it was held:
8. Statement of law made by the Madras High
Court that only when the appellate authority entertains the
appeal and deals with it on merits; the order original
authority should be taken to have merged in the order cannot
be stated as good law in view of the decision of the Supreme
Court in V.M. Salgaocar & P. Ltd. etc. v. Commissioner of
Income Tax, 2000 (38) RLT 619. According to their
Lordships, even when an appeal to the Supreme Court is
dismissed by non-speaking order, the doctrine of merger
applies. This must apply to the non-speaking orders passed
by all appellate authorities as well.
18. However, as noted hereinbefore three judges Bench of the Supreme Court
in Kunhayammed & Ors. (supra) has taken a different view.
19. When an appeal can be taken up for consideration on merit, the delay in
filing the same must be condoned. If the application for condensation of delay is
dismissed, an appeal may lie there-against but the only question, which can be raised in
the appeal, would be as to whether the Commissioner of Appeals was justified refusing
to condone the delay. No other question, far less, any question on merit of the matter
could be gone into by the Appellate Tribunal.
20. In view of this matter, we are of the opinion that as the Commissioner of
Appeal could not have condoned the delay beyond a period of three months, the
Appellate Tribunal cannot be said to have committed any error of law in upholding the
order of the Commissioner of Appeal. There is no merit in this appeal. It is missed
accordingly.