Case Digest on Condonation of Delay under Customs Act

Condonation of Delay means the power of a court or authority to forgive a delay in filing an appeal, application, or any other legal document if there is a valid reason for the delay. Under the Customs Act, 1962, this rule is used when someone misses a deadline but can provide a good explanation to the concerned authority or tribunal.

The Customs Act has specific deadlines for filing appeals with different authorities, such as:

Before Commissioner (Appeals): You must file an appeal within 60 days of receiving the order. If you have a valid reason for the delay, you may get an extension of up to 30 days under Section 128.

Before CESTAT (Customs Tribunal): Appeals must be filed within 3 months. Delays may be excused if you can show sufficient cause under Section 129A.

Principles for Condonation of Delay

1. Sufficient Cause: Courts and tribunals require evidence of "sufficient cause" to excuse a delay. Valid reasons include illness, natural disasters, errors by legal representatives, or genuine procedural and administrative challenges. However, vague or unsupported claims are generally insufficient.
2. Liberal Interpretation: Courts and tribunals often adopt a liberal approach, particularly when the delay does not arise from negligence or malafide intentions. This ensures that substantive justice prevails over technicalities, especially in cases involving public interest or significant legal rights.
3. No Inherent Power Beyond Statutory Limits: Unlike regular courts, statutory bodies like CESTAT or Commissioner (Appeals) are strictly bound by the timelines set under the statute. They cannot condone delays beyond the specific periods prescribed, even if compelling reasons exist. For instance, delays before the Commissioner (Appeals) cannot exceed the statutory 30-day extension, as held in Singh Enterprises v. Commissioner of Central Excise.
4. Non-Bonafide Delays: Delays arising from negligence, lack of diligence, or deliberate acts are not condoned. For instance, if an appellant misses a deadline due to casual inaction or misuse of process, such delays are considered non-bonafide and cannot be excused.

Balancing Procedural Timelines with Justice

The principle of condonation strikes a balance between procedural efficiency and substantive justice. It recognizes that while deadlines are important for maintaining order, rigid adherence should not result in undue hardship where genuine reasons exist. However, this leniency is not absolute and must align with statutory frameworks. The judiciary ensures that this power is exercised judiciously, avoiding misuse by either party to gain unwarranted advantage.

Role in Ensuring Fairness

Condonation of delay reflects a commitment to fairness, enabling parties to seek remedies even when they face unforeseen obstacles. By allowing flexibility within defined limits, this principle prevents the undue deprivation of legal rights while maintaining the integrity of procedural timelines.

CESTAT dismisses Excise Appeal Citing no Discretion to Condone Delay beyond 30 Days Base Corporation Ltd vs Commissioner of Customs CITATION:  2024 TAXSCAN (CESTAT) 778

The appellant had originally challenged a duty liability of Rs. 11,26,541 imposed under Section 11A of the Central Excise Act. However, the appeal to the Commissioner of Service Tax (Appeals) was dismissed for being filed beyond the statutory time limit, following the Supreme Court's ruling in Singh Enterprises v. Commissioner of Central Excise, which clarified that appeals must be filed within 60 days, with an additional 30-day grace period.

The Mumbai CESTAT, comprising C J Mathew and Ajay Sharma, noted that the appellant was unrepresented and the company no longer operated at its registered address. Despite the case being pending for an extended period, the tribunal adhered to the legal precedent set by the Supreme Court, which restricts both the Commissioner (Appeals) and CESTAT from condoning delays beyond the 90-day limit. As a result, the tribunal dismissed the appeal for exceeding the permissible timeframe.

444 Days Delay In Filing Customs Appeal: Dismisses Appeal in Absence of Satisfactory Reason for Delay M/s. Alufit India Pvt Ltd vs Commissioner Of Customs CITATION: 2023 TAXSCAN (CESTAT) 1596

The appeal, filed by the Commissioner of Customs, sought to challenge a prior order in favor of M/S Alufit India Pvt Ltd. The two-judge bench, comprising Justice B.V. Nagarathna and Justice Ujjal Bhuyan, emphasized that the absence of a satisfactory explanation for the significant delay precluded the Court from condoning it, as adherence to procedural timelines is essential.

In dismissing the appeal, the Court noted that the questions of law raised in the case remain unresolved but can be addressed in future, appropriate cases. This decision underscores the judiciary's strict approach to delays in filing appeals, reinforcing that procedural compliance is crucial unless justified with compelling reasons.

Appellate authority can Entertain Appeal by Condoning Delay only upto 30 days after the normal expiry of 60 days: CESTAT The Tehsildar Koil vs Commissioner of Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1483

The case involved an appeal by the Tehsildar Koil/General Secretary challenging the Commissioner (Appeals)' decision to dismiss their appeal for being time-barred. Counsel for the assessee argued that delays beyond the limitation period could be condoned if sufficient cause was shown. However, the department countered that the Commissioner (Appeals) acted within the law by rejecting the appeal solely on the grounds of untimely filing.

Relying on the precedent set in Singh Enterprises v. Commissioner of Central Excise, the CESTAT bench, comprising P.K. Choudhary and Sanjiv Srivastava, upheld the Commissioner’s decision. It reiterated that the law restricts the appellate authority's power to condone delays to a maximum of 30 days beyond the 60-day standard appeal period. Consequently, the tribunal dismissed the assessee’s appeal, maintaining strict adherence to statutory timelines.

Delay in Filing Appeal by 23 Days as Director was Abroad: CESTAT directs Re-Adjudication to Decide on Condonation of Delay M/s E L Sewedy Electrometer (P) Ltd. vs Commissioner of Central GST & Central Excise CITATION:   2023 TAXSCAN (CESTAT) 1004

The Allahabad Bench of CESTAT directed a re-adjudication in the case of M/s E L Sewedy Electrometer (P) Ltd., where a 23-day delay in filing the appeal occurred due to the director being abroad. The Commissioner (Appeals) had dismissed the appeal on the grounds of limitation, stating that the reasons for the delay were contradictory and insufficient. The appellant argued that the delay was justified and should be condoned within the permissible 30-day grace period under the Central Excise Act, 1944.

The Single Bench, led by Technical Member Sanjiv Srivastava, observed that procedural technicalities should not deprive an appellant of the right to have their case heard on merits. The Tribunal found merit in the appellant's explanation for the delay and concluded that the Commissioner (Appeals) erred in denying the condonation. The matter was remanded to the Commissioner (Appeals) for reconsideration and adjudication on the merits of the appeal.

Delay in filing Appeal Cannot be Condoned If Filed after Expiry of normal period of Sixty days: CESTAT Shri Arvind Kumar Soni vs Additional Commissioner Customs CITATION: 2023 TAXSCAN (CESTAT) 998

In the case of Arvind Kumar Soni, the assessee filed an appeal 90 days after receiving the order, exceeding the permissible 30-day grace period. The Commissioner (Appeals) dismissed the appeal on grounds of limitation, as Section 5 of the Limitation Act, 1980, does not apply in such cases.

The Tribunal, led by Sanjiv Srivastava (Technical), upheld the Commissioner’s decision, emphasizing that neither the appellate authority nor the Tribunal has the power to condone delays beyond the statutory 90-day limit. It reinforced that strict adherence to procedural timelines is mandated by law, and the Commissioner (Appeals) acted correctly in dismissing the appeal for exceeding the permissible timeframe.

No evidence to prove Delay in receiving Review order, Order u/s 129D of Customs Act assumed to be passed beyond 3 months: CESTAT upholds rejection of Appeal Nagappa Exports, Vs Commissioner of Customs (Exports), CITATION: 2023 TAXSCAN (CESTAT) 359

The Chennai Bench of CESTAT upheld the rejection of an appeal by the Department, finding that the review order under Section 129D(2) of the Customs Act, 1962, was presumed to have been issued beyond the three-month statutory period due to lack of evidence proving timely receipt of the Order-in-Original by the Reviewing Authority. The Commissioner (Appeals) had dismissed the Department’s appeal on limitation grounds, computing the three-month period from the date of the Order-in-Original rather than the date it was received by the Reviewing Authority. The Department argued that this period should start from the receipt date and that the Reviewing Authority received the order within the time limit, but provided no evidence to substantiate this claim.

The Tribunal, comprising Ms. Sulekha Beevi C.S. (Judicial) and Mr. M. Ajit Kumar (Technical), held that in the absence of evidence showing when the Reviewing Authority received the Order-in-Original, the presumption that the order was passed beyond the prescribed period was valid. Consequently, the CESTAT upheld the findings of the Commissioner (Appeals) and dismissed the Department’s appeal, reinforcing the necessity of adhering to procedural timelines and providing evidence to support claims of compliance.

Grounds on which party may seek Condonation of delay cannot change with passage of time: CESTAT allows Service Tax Refund M/s Lupin Limited vs Commissioner of Central Tax & Respondent Customs (Appeals) CITATION: 2023 TAXSCAN (CESTAT) 342

The appellant, engaged in manufacturing and exporting pharmaceuticals from its SEZ unit in Pithampur, filed refund claims under Notification No. 12/2013-ST for service tax paid on input services received. The refund applications were rejected by both the adjudicating authority and the Commissioner (Appeals) as time-barred. The appellant argued that under the SEZ Act, a special statute, the one-year time limit for filing refunds should be calculated from the date of ISD invoices, as these inform the SEZ unit of the relevant tax amounts.

The Tribunal, comprising P.V. Subba Rao (Technical) and Binu Tamta (Judicial), criticized the adjudicating authority for its narrow interpretation and conservative approach. It underscored that the special and beneficial nature of the SEZ Act warrants a broader, more liberal view when considering delays. The Tribunal held that the grounds for condonation should be assessed in the context of prevailing law and the specific circumstances of the case.

No deliberate withholding of information by Authorised Courier from Customs Department: CESTAT condones delay of 3 months M/s FedEx Express Transportation & Supply Chain Services India Private Ltd vs Commissioner, Customs-New Delhi CITATION:   2023 TAXSCAN (CESTAT) 304

The appeal challenged an order by the Commissioner of Customs (Airport and General), New Delhi, which imposed a penalty of Rs. 50,000 and forfeited a security deposit of Rs. 10 lakhs under Regulation 14 of Courier Import and Export Regulations (CIER), 2010. The penalty stemmed from allegations that FedEx failed to inform Customs promptly about the fraudulent booking of psychotropic drugs in an export shipment, as required under Regulation 12(vii).

The Tribunal, led by Anil Choudhary (Judicial Member), observed that the appellant was in constant contact with Customs and regularly visited Customs offices. It noted that there was no evidence of deliberate withholding of information and that any delay in reporting was minimal and unintentional. The Tribunal concluded that the findings of the Commissioner were unsustainable, as the allegations did not substantiate deliberate non-disclosure. Consequently, the delay was condoned, and the appeal against the penalties was allowed.

Illness of Counsel Not Supported by Medical Certificate: Orissa HC Refuses to Condone Delay in Filing Sales Tax Appeal Divisional Manager, O.F.D.C. Ltd. vs Orissa Sales Tax Tribunal CITATION:   2023 TAXSCAN (HC) 422

The petitioner, Divisional Manager, O.F.D.C. Ltd, initially filed a writ petition on 25th January 2011, which was later dismissed for non-prosecution on 3rd November 2014. Subsequently, a tax revision was filed after a 10-month delay. The court observed that the petitioner demonstrated a casual attitude, failing to support the claim of illness with a medical certificate, which is essential for justifying such delays under the Limitation Act, 1963.

Justice M.S. Raman emphasized that condonation of delay is an exception to procedural timelines and must be backed by valid, credible reasons. The absence of a medical certificate or other evidence to corroborate the counsel’s illness meant the delay could not be justified. The court concluded that the petitioner’s negligence and lack of due diligence were sufficient grounds to dismiss the application, underscoring the need for adherence to statutory time limits in filing appeals.

Delay in filing Customs Appeal by Sick Company during pendency of Matter before BIFR is ‘Reasonable’: CESTAT Condones Delay of 2644 Days ROYAL CUSHION VINYL PRODUCTS LIMITED vs COMMISSIONER OF CUSTOMS CITATION: 2022 TAXSCAN (CESTAT) 461

The company had been pursuing proceedings before the Board for Industrial and Financial Reconstruction (BIFR) during the delay period. The appeal was initially dismissed due to the extensive delay. However, the Tribunal, comprising S.K. Mohanty (Judicial Member) and P. Anjani Kumar (Technical Member), found that the delay was not due to negligence but arose from circumstances beyond the company's control.

The Tribunal emphasized that condonation of delay should not only consider the duration but also the reasons, assessing their genuineness and bona fides. Convinced by the company's explanation, the Tribunal deemed the delay as reasonable, citing the ongoing BIFR proceedings as a valid cause. It allowed the miscellaneous application for condonation, directed the Registry to assign a number to the appeal, and scheduled it for a final hearing, granting interim relief to the appellant. This ruling underscores a pragmatic approach in cases where statutory delays stem from legitimate hardships faced by appellants.

Delay in filing Appeal due to Drafting and Calculation Error can be Condoned: CESTAT M/s Dow International Pvt Ltd vs Commissioner of Customs CITATION: 2022 TAXSCAN (CESTAT) 102

The appellant had challenged the rejection of their appeal by the Commissioner (Appeals), who dismissed it on the grounds of limitation, stating that no valid reason for the delay was provided. The appellant clarified that while the permissible limit for filing the appeal was 60 days, the filing occurred on the 62nd day due to an inadvertent calculation error and drafting-related delays.

Judicial Member Anil Choudhary accepted the appellant’s explanation and ruled that the delay was minor and adequately justified. The Tribunal condoned the two-day delay and remanded the matter back to the Commissioner (Appeals) for a decision on the merits, ensuring the appellant is heard.

Tribunal lacks power to condone delay in filing the appeal before Commissioner (Appeals) beyond period of 90 days: CESTAT Shambhu Synthetics Pvt. Ltd vs Commissioner of Customs CITATION:  2021 TAXSCAN (CESTAT) 294

The appellant challenged an order by the Commissioner (Appeals), which dismissed their appeal on grounds of exceeding the permissible time limit. Under Section 128, an appeal must be filed within 60 days, with a possible extension of 30 days for sufficient cause. The appellant argued that the short delay beyond 90 days could be condoned under Section 5 of the Limitation Act, 1963. However, the Department countered that the Customs Act expressly limits the condonable period to 30 days beyond the initial 60 days, leaving no room for applying the Limitation Act.

The Tribunal, led by Justice Dilip Gupta, upheld this interpretation, citing the Supreme Court's decision in Singh Enterprises, which clarifies that statutory time limits under the Customs Act are binding. The Tribunal concluded that delays exceeding 90 days cannot be condoned as the statute does not permit it, and the Limitation Act is inapplicable.

Insufficiency in Medical Evidence for Condonation of 2727-Day Delay in CESTAT Appeal: Madras HC dismisses Petition Vision Holidays vs The Customs Excise and Service Tax Appellate Tribunal CITATION:   2024 TAXSCAN (HC) 1298

The petitioner attributed the delay to the Managing Partner’s chronic disc prolapse since 2016 and disruptions caused by the COVID-19 lockdown from 2020 to 2022. However, the CESTAT found the medical evidence insufficient, noting that the certificates only confirmed ongoing treatment without proving the petitioner’s inability to manage affairs during this extended period.

Justice Senthilkumar Ramamoorthy upheld the CESTAT's decision, agreeing that the petitioner failed to establish sufficient cause for such an extraordinary delay. The court emphasized that the medical evidence lacked the specificity required to justify the prolonged inaction. Consequently, the writ petition was dismissed, reaffirming the importance of strict compliance with statutory timelines and substantiated evidence for condonation of significant delays.

No Justifiable Reasons for Delay in Filing Appeal after Defect Notice: Delhi HC confirms CESTAT Order COMMISSIONER OF CUSTOMS -AIRPORT AND GENERAL vs M/S. BERGEN ENGINES INDIA PVT. LTD. CITATION: 2023 TAXSCAN (HC) 917

The case involved M/s Bergen Engines India Pvt Ltd, where the Adjudicating Authority accepted the declared transaction value of imported goods under Rule 3(3)(a) of the Customs Valuation Rules, 2007, despite the foreign suppliers being related to the importer. The Revenue appealed to the Commissioner of Customs (Appeals), which was rejected, prompting an appeal to CESTAT.

CESTAT found that the Deputy Commissioner of Customs (Review) was aware the appeal had been returned as defective but failed to take timely corrective action to refile it. The Tribunal concluded that no valid explanation was provided for the delay in addressing the defect notice. A High Court Bench of Justice Vibhu Bakhru and Justice Amit Mahajan agreed with CESTAT’s reasoning, stating the order was well-founded and could not be faulted. The case reinforces the necessity of addressing procedural defects promptly to avoid dismissal.

CESTAT is not competent to Condone Delay in filing of Appeal before First Appellate Authority beyond 30 Days: CESTAT Dismisses Appeal Jai Maa Durga Engineers vs The Additional Commissioner of Central Excise & Service Tax CITATION: 2023 TAXSCAN (CESTAT) 1381

The appellant challenged the dismissal of their appeal by the Commissioner (Appeals) as time-barred. The Order-in-Original was issued on 10.01.2017 and communicated to the appellant on 17.01.2017. The appeal, due by 17.03.2017, was filed only on 15.05.2017, exceeding both the standard 60-day filing period and the additional 30-day condonable window.

The Tribunal, comprising P.K. Choudhary (Judicial Member) and Sanjiv Srivastava (Technical Member), reiterated that under Section 35 of the Central Excise Act, the appellate authority cannot condone delays beyond the 30-day extension provided by law. The Tribunal noted that the appellant’s justification, attributing the delay to business inexperience despite engaging a consultant, was unconvincing. Citing the complete exclusion of Section 5 of the Limitation Act in such cases, the Tribunal dismissed the appeal, emphasizing the strict statutory limits for filing appeals.

Customs dept failed to prove delay in Receiving Order from Review Cell: CESTAT dismisses Appeal Commissioner of Customs vs M/s. HCL Info Systems CITATION: 2023 TAXSCAN (CESTAT) 1362

The case involved M/s HCL Info Systems, where the Customs Department argued that the review order was delayed due to the Order-in-Original being received by the Review Cell on 11.03.2010, even though it was issued on 04.03.2010. However, the Commissioner (Appeals) found an 8-day delay in passing the review order, calculated from the issuance date, and rejected the appeal for exceeding the statutory time limit under Section 129D(3) of the Customs Act.

The Tribunal, comprising Ms. Sulekha Beevi C.S. (Judicial) and Shri M. Ajit Kumar (Technical), noted that the department failed to provide evidence of when the Order-in-Original was received by the Review Cell, despite repeated opportunities. It found the claim of an 11.03.2010 receipt date improbable, as both offices were in the same building. Citing similar precedents, the Tribunal held that Revenue failed to substantiate its case, creating a strong inference of procedural delays. The Tribunal concluded that the department’s appeal lacked merit and upheld the Commissioner’s findings.

Delay of One Day in filing Appeal: CESTAT slams the practice of Depriving Remedy to Taxpayers in a ‘Hyper-technical Manner’ Hari Babu vs Commissioner of Customs CITATION: 2021 TAXSCAN (CESTAT) 279

The dispute arose when the Order-in-Original was dispatched on 15.02.2019 and, according to the assessee, received on 18.02.2019. The appeal was filed on 22.04.2019, following public holidays on 20th and 21st April, 2019. The first appellate authority dismissed the appeal on the technical ground of a one-day delay.

Judicial Member Sulekha Beevi C.S., citing Sections 128(1) and 153 of the Customs Act, 1962, held that "communication" and "service" require the order to be brought to the knowledge of the aggrieved party, and mere dispatch does not suffice. The Tribunal observed that even if the date of dispatch was used to compute the timeline, the delay was within the condonable period of 30 days. Slamming the hyper-technical approach, the Tribunal emphasized that defects in filing appeals should be rectifiable, and taxpayers should not be deprived of their statutory remedy over minor procedural issues.

Delhi HC refuses to Condone of Delay of 309 Days in Filing Revenue’s Appeal against Reduction of Penalty Imposed on Customs Broker License COMMISSIONER OF CUSTOMS vs SADANAND CHAUDHARY CITATION: 2023 TAXSCAN (HC) 771

The case involved allegations against the respondent for failing to verify the antecedents, Import-Export Code (IEC), identity, and operational address of their client. The importer was accused of overvaluing consignments to claim fraudulent duty drawbacks. Under the Customs Brokers Licensing Regulations (CBLR), 2018, brokers are required to ensure compliance with due diligence standards.

The Revenue argued that the CESTAT’s decision to impose only forfeiture of the security deposit was contrary to the regulations, which prescribe stricter penalties, including license revocation. Citing a prior Delhi High Court decision in Commissioner of Customs (General) v. KVS Cargo, the Revenue contended that negligence by the broker warranted harsher measures. However, the Division Bench, comprising Justice Vibhu Bakhru and Justice Amit Mahajan, found the condonation application "bereft of particulars" and noted a lack of sufficient reason for the delay. The court also identified procedural lapses, such as failure to serve notice on the respondent-assessee, and rejected the appeal, emphasizing that the grounds provided did not justify the substantial delay.

Appeal filed beyond Condonable Period as per Section 128 of Customs Act: CESTAT dismisses Appeal Smt. Suparna Karmakar vs Commissioner of Customs CITATION: 2023 TAXSCAN (CESTAT) 1293

The case arose after the appellant’s adjudication order dated 31.07.2019 was appealed before the Commissioner (Appeals) on 28.11.2019. The Commissioner (Appeals) dismissed the appeal as time-barred, as it exceeded the statutory period of 60 days and the additional condonable 30-day period. Subsequently, the appellant approached the Calcutta High Court, which dismissed their writ petition on 20.07.2021, advising them to pursue the alternative remedies available.

During the hearing, the appellant argued that the High Court’s observations implied condonation of delay in filing the appeal before the Commissioner (Appeals). However, the CESTAT, presided by Judicial Member Ashok Jindal, clarified that the High Court merely allowed the appellant to pursue the alternative remedy and did not condone the delay. The Tribunal reaffirmed that under Section 128, delays beyond the 90-day limit cannot be condoned. Consequently, the Tribunal dismissed the appeal, upholding the Commissioner (Appeals)’ order, and reiterated the importance of adhering to statutory timelines for filing appeals

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates