HIGH COURT OF KARNATAKA
Concept Hydro Pneumatic (P.) Ltd.
Commissioner of Central Excise, Bangalore II Commissionerate
CENTRAL EXCISE APPEAL NO. 1 OF 2016
AUGUST 24, 2016
R. Dakshina Murthy, Adv. for the Appellant. K.V. Aravind, Standing Counsel for the Respondent.
Jayant Patel J. – Admit.
2. Mr. K.V. Aravind, learned counsel for respondent waives notice of admission. With the consent of the learned counsel appearing for both sides, the appeal is finally heard.
3. The present appeal is directed against the order dated 27.3.2015 passed by the Tribunal whereby, the Tribunal, for the reasons recorded in the order, has dismissed the appeal by not condoning the delay.
4. We have heard Mr. R. Dakshina Murthy, learned counsel appearing for the appellant and Mr. K.V. Aravind, learned counsel for the respondent.
5. As such, it is undisputed position that, there was delay of 117 days in preferring the appeal. The explanation given by the appellant was that, because of financial constraint since the company was unable to deposit the 10% requisite amount, there is delay in preferring the appeal. On merits, it has been contended that there is arguable case to be considered in the appeal. Learned counsel submitted that the appellant is agreeable to pay costs if this Court is inclined to consider the matter on merits. Whereas, learned counsel appearing for the respondent resisted the aspects of condonation of delay on the ground when there was delay or – lapse on the part of the appellant in not putting the case before the Board of Directors and even after the knowledge, the appeal was not filed. Therefore, it could said that the delay is not properly explained and therefore, the Tribunal has rightly exercised the power.
6. In our view, it is by now well settled that the condonation of delay though is required to be sufficiently explained but at the same time, if the Court finds that there is substantial case to be considered in the appeal, the Court may also examine as to whether the delay could be condoned by imposing suitable costs or not. It is true that, the delay may operate as bar in pursuing the proceedings but, to what extent the discretion should be exercised would vary from facts to facts. Financial inability cannot be a ground which need not be considered at the time of condonation of delay. On the contrary, financial inability can be one of the valid grounds for accepting the contention that the appellant was prevented by sufficient reasons in not preferring the appeal. We do not want to express any view on the merits of the appeal but it suffices to observe that it was the case to be considered in the appeal. It may be that in a given case, Court may decline to exercise discretion for condoning the delay, if, during the period of delay, the rights of the parties are substantially altered and/or irreversible situation is created but we do not find any of the requirements are satisfied in the present case.
7. In view of the above, we find, considering the facts and circumstances, the Tribunal ought to have exercised the discretion for condonation of delay. Further, declining the exercise of discretion for condonation of delay may result into grave injustice to the appellant and appellant would be deprived of the case to be considered on merits, more particularly, when no prejudice is going to be cause to the respondent-Department, since on the demand, the interest if ultimately is maintained, it is to follow. Under these circumstances, we find that the appeal deserves to be allowed. Delay deserves to be condoned and the Tribunal should be directed to decide the appeal on merits.
8. In view of the above, the impugned order of the Tribunal is set aside with the observation that the delay in preferring the appeal shall stand condoned on condition that the appellant pays a cost of Rs. 10,000/- to the respondent within a period of four weeks from today. After the above condition is complied with, the appeal shall stand restored before the Tribunal. The Tribunal shall consider the appeal on merits after giving opportunity of hearing to both the sides and shall pass an order in accordance with law.
9. As the learned counsel appearing for respondent has stated that, let the cost be deposited with the Karnataka State Legal Services Authority so that the money may be utilized for the betterment of the poor. Hence, we further direct that the amount of cost of Rs. 10,000/- for the respondent shall be deposited by the appellant with the Karnataka State Legal Services Authority and the receipt shall be produced in the proceedings before the Tribunal by way of compliance of order of this Court.
Appeal allowed accordingly.