M.P. Steel Corporation vs Commnr. Of Central Excise

1. The facts giving rise to the present appeal are as follows. The appellant is engaged in ship breaking activity at Alang Ship Breaking Yard. The appellant imported a vessel, namely, M.V. Olinda, for the purpose of breaking the same, and filed a Bill of Entry when the vessel was imported on 7.2.1992. It declared in the said Bill of Entry that the Light Displacement Tonnage of the vessel was 7009 metric tons. On 19.2.1992, the appellant was informed by the Superintendent of Customs and Central Excise Alang that the Light Displacement Tonnage of the ship is actually 8570 tons and that customs duty was to be levied on this tonnage. On 3.3.1992, the appellant cleared the vessel on payment of customs duty on the basis of 7009 metric tons and executed a bank guarantee for Rs.19,90,275/- being the difference in customs duty on 1561 metric tons. On 25.3.1992, the Collector of Customs, Rajkot, directed the Assistant Collector, Bhavnagar to encash the bank guarantee furnished by the appellant. On 2.4.1992, the Superintendent of Customs and Central Excise sent a letter to the appellant communicating the decision of the Collector, as aforesaid. The bank guarantee was duly encashed on 3.4.1992. After protesting against the said illegal action of the Department in encashing the bank guarantee, the appellant preferred an appeal against the Superintendent’s letter dated 2.4.1992 and the Collector’s order dated 25.3.1992 before CEGAT. On 23.6.1998, the Appellate Tribunal allowed the appeal and set aside the order of the Collector dated 25.3.1992. In the year 2000, the Department preferred an appeal before this Court. On 12.3.2003, this Court allowed the appeal holding:

52. The present case stands on a slightly different footing. The abortive appeal had been filed against orders passed in March- April, 1992. The present appeal was filed under Section 128, which Section continues on the statute book till date. Before its amendment in 2001, it provided a maximum period of 180 days within which an appeal could be filed. Time began to run on 3.4.1992 under Section 128 pre amendment when the appellant received the order of the Superintendent of Customs intimating it about an order passed by the Collector of Customs on 25.3.1992. Under Section 128 as it then stood a person aggrieved by a decision or order passed by a Superintendent of Customs could appeal to the Collector (Appeals) within three months from the date of communication to him of such decision or order. On the principles contained in Section 14 of the Limitation Act the time taken in prosecuting an abortive proceeding would have to be excluded as the appellant was prosecuting bona fide with due diligence the appeal before CEGAT which was allowed in its favour by CEGAT on 23.6.1998. The Department preferred an appeal against the said order sometime in the year 2000 which appeal was decided in their favour by this court only on 12.3.2003 by which CEGAT’s order was set aside on the ground that CEGAT had no jurisdiction to entertain such appeal. The time taken from 12.3.2003 to 23.5.2003, on which date the present appeal was filed before the Commissioner (Appeals) would be within the period of 180 days provided by the pre amended Section 128, when added to the time taken between 3.4.1992 and 22.6.1992. The amended Section 128 has now reduced this period, with effect from 2001, to 60 days plus 30 days, which is 90 days. The order that is challenged in the present case was passed before 2001. The right of appeal within a period of 180 days (which includes the discretionary period of 90 days) from the date of the said order was a right which vested in the appellant. A shadow was cast by the abortive appeal from 1992 right upto 2003. This shadow was lifted when it became clear that the proceeding filed in1992 was a proceeding before the wrong forum. The vested right of appeal within the period of 180 days had not yet got over. Upon the lifting of the shadow, a certain residuary period within which a proper appeal could be filed still remained. That period would continue to be within the period of 180 days notwithstanding the amendment made in 2001 as otherwise the right to appeal itself would vanish given the shorter period of limitation provided by Section 128 after 2001.

44. Shri A.K. Sanghi, learned senior counsel appearing on behalf of the revenue, has strongly contended before us that the present appeal must attract the limitation period as on the date of its filing. That being so, it is clear that the present appeal having been filed before CESTAT only on 23.5.2003, it is Section 128 post amendment that would apply and therefore the maximum period available to the appellant would be 60 plus 30 days. Even if time taken in the abortive proceedings is to be excluded, the appeal filed will be out of time being beyond the aforesaid period.

“30. Provision for suits, etc., for which the prescribed period is shorter than the period prescribed by the Indian Limitation Act, 1908.—Notwithstanding anything contained in this Act,—

53. We, therefore, set aside the order dated 25.2.2004 and remand the case to CESTAT for a decision on merits. The appeal is allowed in the aforesaid terms. There will be no order as to costs.

April 23, 2015.