In what could be a wake up call for the Central Board of Indirect Taxes and Customs (CBIC) officials, the Supreme Court has dismissed an appeal filed by the board against Balrampur Chini Mill on account of delay in filing. The decision comes just two days after the CBIC had asked its officials to strictly comply with the timeline in filing appeals.

“There is delay of 426 days in filing the Special Leave Petition. We do not find that there is sufficient cause for the delay. Consequently, the Special Leave Petition is dismissed as barred by limitations,” a division Bench of Justice Indira Banerjee and Justice Sanjeev Khanna said in its order on a plea presented before admission.

Timeline for filing appeal

Instructions, issued in 2017, prescribed 43 days for filing civil appeal against the order of CESTAT (the Customs Excise and Service Tax Appellate Tribunal) and 60 days for filing the Special Leave Petition (SLP) against the order of High Courts, and total 120 days is prescribed for filing appeal in the High Court.

Also read: CBIC calls for ‘disciplinary’ action in case of appeal dismissed on account of late filing

On January 19, the CBIC issued a circular asking field formations to strictly adhere to the aspect of limitation in filing appeals/ petitions before courts or tribunal. “The practice of filing Condonation of Delay Application in a mechanical fashion, without attributing cogent reasons, if any, must be discouraged,” it said while adding that supervising officers should personally monitor that the appeals/petitions are filed on time in the interest of the tax department.

“Any appeal/petition dismissed, solely on the grounds of limitation, may be scrupulously examined and corrective steps may be taken, including disciplinary action, wherever merited,” the circular said.

Special leave petition

The current special leave petition was filed against final judgment and order dated April 12, 2019 passed by the Lucknow Bench of Allahabad High Court. The company approached the High Court challenging the showcause notice dated March 24, 2017 issued by the Assistant Commissioner, Central Excise and Service Divisions, Faizabad as well as a circular dated April 25, 2016, of CBIC thereby seeking to reverse the CENVAT credit relating to ‘bagasse’.

During the process of manufacture of sugar, waste in the form of bagasse emerges, and the manufacturer cannot control the process and prevent the emergence of bagasse. It was said that bagasse is a non excisable good for the purpose of reversal of credit of input and input services.

After going through arguments, a division Bench of the High Court said that in absence of bagasse being a manufactured final product, the obligation of reversal of CENVAT credit is not attracted. Accordingly, the showcause notice was quashed. Aggrieved by the ruling, the CBIC decided to move to the apex court but could not file the special leave petition in time.