[Cites 3, Cited by 0]
Gujarat High Court
Shree Ukai Pradesh Sahakari Khand Udyog ... vs Union Of India on 11 December, 2025
Author: A.S. Supehia
Bench: A.S. Supehia
NEUTRAL CITATION
C/SCA/15499/2025 JUDGMENT DATED: 11/12/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO.15499 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA sd/-
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI sd/-
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Approved for Reporting Yes No
✔
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SHREE UKAI PRADESH SAHAKARI KHAND UDYOG MANDALI LTD
Versus
UNION OF INDIA & ORS.
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Appearance:
MR DHAVAL SHAH(2354) for the Petitioner(s) No. 1
MS HARDIKA VYAS(11450) for the Respondent(s) No. 1,2,3,4
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 11/12/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. Heard learned advocate Mr.Dhaval Shah for the petitioner and
learned advocate Mr.C.B.Gupta for the respondents. With the
consent of the parties, the matter is taken up for hearing today itself.
2. RULE returnable forthwith. Learned advocate Mr.Gupta
waives service of notice of rule on behalf of the respondents.
3. By this petition, the petitioner has prayed to quash and set
aside the impugned Miscellaneous Order No. 10352 of 2025 dated
05.06.2025, whereby the Customs, Central Excise and Service Tax
Appellate Tribunal, West Zonal Bench, Ahmedabad (for short
"CESTAT") has dismissed the application filed by the petitioner being
Excise Misc. Application (ROA) No. 11193 of 2024 on the ground that
the same has been filed after a gap of seven (7) years.
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4. The facts in brief are that the petitioner is a Co-operative
Society duly registered under the Gujarat Co-operative Societies Act,
1961, inter alia, engaged in the manufacturing of sugar and
molasses. The petitioner - Mandali was duly registered with the
Central Excise Department under Reg.No.AAAAS5807JXM001 for the
manufacture of V.P. Sugar under Chapter No. 1701 and molasses
under Chapter No. 1703 of the Central Excise Tariff Act, 1985,
respectively. The petitioner - Mandali was availing the facility of
CENVAT credit on inputs/capital goods/input services under the
provisions of the CENVAT Credit Rules, 2004.
4.1. The petitioner -Mandali was clearing the final product on
payment of Central Excise duty through the current account and
CENVAT Credit account, as required under Rule 8 of the Central
Excise Rules, 2002. It is the case of the petitioner that the petitioner-
Mandali was facing a financial crisis since long and had become a
sick Mandali. Thereafter, the State of Gujarat came out with a revival
plan for the sick co-operative sugar mills. The petitioner - Mandali
continued its business. However, in the year 2013, the Assessing
Officer, while examining the monthly returns of excisable goods and
availing of CENVAT credit for the period from May 2013 to August
2014, observed that the petitioner - Mandali had shown duty payable
on levy/non-levy sugar amounting to Rs.73,43,319/- including sugar
cess, education cess and health cess, and on molasses amounting to
Rs.38,80,352/-. In view of such facts, the Assessing Officer opined
that the petitioner - Mandali had not paid the duties either through
the Account Current (PLA) or through the CENVAT Credit Account.
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4.2. A show cause notice dated 10.12.2014 was served upon the
petitioner - Mandali calling upon it to pay the Central Excise duty of
Rs.1,12,23,672/- along with penalty at the rate of one per cent per
month for the period from 11.07.2014 onwards. Thereafter, the
respondent no. 2 passed an Order-in-Original dated 23.07.2015,
which was received on 19.08.2015, whereby the entire demand
raised in the show cause notice stood confirmed. It is evident that the
petitioner did not appear for personal hearing. The petitioner -
Mandali thereafter informed respondent no.2 about the payment of
Rs.10,00,000/- through PLA and Rs.32,32,980/- through the CENVAT
Credit Account. However, Rs.8,41,780/- was paid as pre-deposit for
filing an appeal before the CESTAT. The petitioner - Mandali also
sought seven (7) equal monthly instalments to deposit the remaining
duty amount out of its earnings.
4.3. It appears that during the intervening period, proceedings by
the Provident Fund Commissioner were also undertaken and an
amount of Rs.25,28,000/- was released from the Bank of India.
Accordingly, pursuant to the request of the petitioner - Mandali, the
office of the respondent no. 3 allowed the payment of Government
dues of Rs. 69,90,692/- in seven (7) equal monthly instalments of Rs.
10,00,000/-.
4.4. Thereafter, the petitioner - Mandali filed an appeal before the
CESTAT challenging the Order-in-Original dated 23.07.2015 along
with a Misc. Application for condonation of delay of 98 days on
26.02.2016, contending that the factory was under closure from
22.02.2014 to 21.11.2015 due to acute financial crisis.
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4.5. Vide order dated 19.08.2017, the CESTAT directed the
petitioner - Mandali to file an affidavit in support of the reasons for
the inordinate delay of 98 days in filing the appeal. It appears that
since no explanation was tendered, the CESTAT, by an order dated
19.09.2017, dismissed the Misc. Application for condonation of delay
due to failure to file the affidavit and, consequently, the appeal was
also dismissed.
4.6. It is the case of the petitioner - Mandali that the Mandali
remained closed from 2016-2017 to 2020-2021 due to financial crisis
and hence the order passed by the CESTAT could not be attended to
for further course of action. However, in the year 2022, the Gujarat
Tribal Development Department came out with a revival plan vide
Circular dated 15.09.2022 and the petitioner - Mandali tried to
revive its business operations. The officers of respondent nos. 3 and
4 started recovery proceedings and it is the case of the petitioner
that at that time the petitioner came to know about the appeal having
been dismissed on the ground of delay.
4.7. Thereafter, the petitioner filed a Misc. Application for
restoration of the Misc. Application for condonation of delay on
01.10.2024 and explained the reasons for delay that the Mandali was
closed due to financial crisis. The CESTAT rejected the same on the
ground that the Misc. Application was filed after a long gap of seven
(7) years without any convincing explanation. Hence, the order
rejecting the application is challenged before this Court in the
present petition
5. Learned advocate Mr.Dhaval Shah appearing for the petitioner
submitted that the impugned order passed by the CESTAT is
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perverse and illegal and the same is required to be quashed and set
aside, more particularly for the reason that the petitioner - Mandali
had categorically averred in the application that the Mandali was
closed due to financial constraints. It is contended that before the
CESTAT, the order arising from the Order-in-Appeal dated
15.11.2017 was challenged, whereby vide order dated 24.07.2025,
the CESTAT has allowed the delay condonation application wherein
there was a delay of more than 2000 days on the same ground that
the factory was closed due to financial constraints. It is urged that
the present writ petition may be allowed by quashing and setting
aside the impugned order.
6. Per contra, learned advocate Mr. Gupta appearing for the
respondents submitted that the petitioner - Mandali cannot place
reliance on the decision dated 24.07.2025 allowing Delay
Condonation Application No. 12261 of 2024 setting aside the Order-
in-Appeal dated 15.11.2017 since the department was unable to point
out that the said order was served on 19.12.2017 on the appellant,
and on this ground, as well as deposit of 90% of the amount
recovered, the CESTAT condoned the delay, whereas in the instant
case, after the order was passed by the CESTAT asking the
petitioner-Mandali to tender evidence of delay of 98 days, the
petitioner - Mandali did not file any application thereafter and
therefore, the CESTAT was constrained to dismiss the application
vide order dated 19.09.2017.
7. We have heard the learned advocates appearing for the
respective parties.
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8. The afore-noted facts about delay in filing the Excise
Miscellaneous Application (ROA) No. 11193 of 2024 in Excise Appeal
No.10587 of 2016 after a period of more than seven (7) years are not
in dispute. The petitioner - Mandali had preferred an appeal being
Excise Appeal No. 10587 of 2016 challenging the Order-in-Original
dated 23.07.2015, in which there was a delay of 98 days. The
CESTAT gave an opportunity to tender an explanation for the delay
in filing the appeal, which was not done, and hence, vide order dated
19.09.2017, the said appeal came to be dismissed. The petitioner -
Mandali thereafter went into slumber and did not do anything and all
of a sudden, after a period of seven (7) years, an application for
restoration being Excise Miscellaneous Application (ROA) No. 11193
of 2024 was filed before the CESTAT and the only explanation put
forward before the CESTAT was that the Mandali was financially
struggling and was closed down and hence could not keep track of its
proceedings before the CESTAT.
9. It is interesting to note that the Mandali was already
represented by an advocate in all the proceedings. However, neither
the advocate nor the petitioner was vigilant enough to pursue the
proceedings of Excise Appeal No. 10587 of 2016 in which there was
a delay of 98 days. Thus, Excise Appeal No. 10587 of 2016 was
belatedly filed having a delay of 98 days and, when the CESTAT
directed the petitioner - Mandali to file an appropriate response
explaining the delay, nothing was done. Hence, the CESTAT was
constrained to dismiss the appeal vide order dated 19.09.2017. The
order dated 19.09.2017 reflects that no one remained present on
behalf of the petitioner despite extending an opportunity to the
petitioner for filing an affidavit. Thus, the petitioner - Mandali was
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negligent on four counts, firstly, in filing the appeal belatedly by 98
days; secondly, in not explaining the delay of 98 days despite the
directions of the CESTAT; thirdly, in not remaining present in the
proceedings; and fourthly, in filing the restoration application after a
gap of seven (7) years. The CESTAT, after considering all these facts,
has held as under:
"4.4. In the present case, we find that the only ground which has been
given by the applicant is that their business was closed. It is, however,
observed that the Managing Director of the Company was very much
there. If the Tribunal had dismissed their appeal for non-compliance of its
order to submit an affidavit explaining the delay of 98 days, he should
have engaged a consultant and submitted an affidavit. There is no
explanation for not doing the same. Again, after the dismissal order dated
19.09.2017, this miscellaneous application has been filed by the applicant
on 01.10.2024, i.e. after a gap of seven (7) years, without any explanation.
We therefore find that Miscellaneous Application No. E/COD/10252/2016
with Appeal No. E/10587/2016 and recalling the order No. A/12664/2017
dated 19.09.2017 is devoid of merits and therefore, the same is
dismissed."
10. We do not find any convincing reason to interfere with the
order passed by the CESTAT in view of the fact that the petitioner -
Mandali has been negligent in pursuing the legal remedy before the
CESTAT. We are not convinced that merely because the petitioner -
Mandali was closed down, it lost track of the proceedings which it
had filed challenging the Order-in-Original dated 23.07.2015. Insofar
as the reliance placed by learned advocate Mr. Dhaval Shah on the
decision dated 24.07.2025 passed by the CESTAT in Delay
Condonation Application No. 12261 of 2024 in Appeal D. No. 12260
of 2024 challenging the Order-in-Appeal dated 15.11.2017 condoning
delay of almost 2000 days is concerned, we are of the opinion that
the same will not come to the rescue of the petitioner because the
facts recorded in the said order disclose that the Order-in-Appeal
dated 15.11.2017 was not served upon the appellant and hence they
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were unable to file the appeal before the CESTAT. Looking to the
aforesaid reasons and also the deposit of 90% of the recovery amount
by the appellant - Mandali, the CESTAT condoned the delay. These
are vital distinguishing features in the present petition.
11. We may refer to the decision of the Supreme Court in the case
of Sheo Raj Singh vs. Union of India, 2023 (10) S.C.C. 531, wherein
the Supreme Court has revisited the power of the High Court in
condoning delay while examining the expression "sufficient cause".
The Apex Court has set aside the order passed by the High Court
condoning the delay of 479 days. It is held as under :
"30. Considering the aforementioned decisions, there cannot be any
quarrel that this Court has stepped in to ensure that substantive rights of
private parties and the State are not defeated at the threshold simply due
to technical considerations of delay. However, these decisions
notwithstanding, we reiterate that condonation of delay being a
discretionary power available to courts, exercise of discretion must
necessarily depend upon the sufficiency of the cause shown and the
degree of acceptability of the explanation, the length of delay being
immaterial.
31. Sometimes, due to want of sufficient cause being shown or an
acceptable explanation being proffered, delay of the shortest range may
not be condoned whereas, in certain other cases, delay of long periods can
be condoned if the explanation is satisfactory and acceptable. Of course,
the courts must distinguish between an "explanation" and an "excuse". An
"explanation" is designed to give someone all of the facts and lay out the
cause for something. It helps clarify the circumstances of a particular
event and allows the person to point out that something that has happened
is not his fault, if it is really not his fault. Care must however be taken to
distinguish an "explanation" from an "excuse". Although people tend to
see "explanation" and "excuse" as the same thing and struggle to find out
the difference between the two, there is a distinction which, though fine, is
real.
32. An "excuse" is often offered by a person to deny responsibility and
consequences when under attack. It is sort of a defensive action. Calling
something as just an "excuse" would imply that the explanation proffered
is believed not to be true. Thus said, there is no formula that caters to all
situations and, therefore, each case for condonation of delay based on
existence or absence of sufficient cause has to be decided on its own facts.
At this stage, we cannot but lament that it is only excuses, and not
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explanations, that are more often accepted for condonation of long delays
to safeguard public interest from those hidden forces whose sole agenda is
to ensure that a meritorious claim does not reach the higher courts for
adjudication."
12. In the present petition, the petitioner - Mandali was pursuing
the remedy of challenging the appeal in which it was called upon to
file an affidavit explaining the delay of 98 days, which it did not do,
and ultimately, the Misc. Application seeking condonation of delay of
98 days was rejected. The same was responded to by the petitioner
after a gap of seven (7) years by filing a Misc. Application for
restoration of the application seeking condonation of delay of 98
days. The Apex Court has cautioned that care must be taken to
distinguish an explanation from an excuse, since an excuse is often
offered by a person to deny responsibility and consequences when
under attack, and each case for condonation of delay based on
existence or absence of sufficient cause has to be decided on its own
facts. The only "excuse" which the petitioner has tendered for the
delay is financial constraint. No other plausible explanation for delay
is forthcoming from the petitioner.
13. Hence, the writ petition fails and the same stands rejected.
sd/-
(A. S. SUPEHIA, J)
sd/-
(PRANAV TRIVEDI,J)
phalguni/8
