The Delhi High Court has refused to interfere with the Customs, Excise and Service Tax Appellate Tribunal’s (CESTAT) decision rejecting applications seeking condonation of an approximately 968-day delay in filing customs appeals, holding that the appellants failed to establish “sufficient cause” for their prolonged inaction.

The Bench of Justice Anil Khetarpal and Justice Shail Jain has observed that the Tribunal had considered the relevant circumstances and that its decision did not suffer from perversity, disregard of material evidence or any erroneous proposition of law.

The appeals arose from a common adjudication proceeding concerning certain imports. A Show Cause Notice had been issued following which adjudication proceedings were conducted by the Principal Commissioner of Customs (Import), ICD Tughlakabad, New Delhi.

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Several opportunities of personal hearing were granted during the proceedings, including hearings scheduled for April 15, May 19, September 2 and September 28, 2021. The appellants were represented through counsel at the September hearings and sought time to submit their written defence.

The proceedings culminated in Order-in-Original No. 19/2021/SG/Pr. Commr./ICD-Import/TKD dated December 7, 2021. By the order, the Principal Commissioner, among other things, re-determined the declared value in the Bills of Entry, ordered recovery of differential customs duty and imposed penalties.

The principal defence was that the Order-in-Original had not been served upon the appellants at their registered address and that they were unaware that the adjudication order had been passed.

According to the appellants, they first came to know about the order when the Department initiated proceedings to freeze their bank accounts on February 27, 2024. They subsequently sought a copy of the adjudication order and eventually received it electronically from the office of the Principal Commissioner on July 2, 2024.

The appeals before CESTAT were thereafter filed on August 1, 2024. Since the appeals were filed beyond the statutory period, the appellants were required to seek condonation of delay. They eventually filed applications for condonation on December 20, 2024, claiming that the delay was attributable to the alleged non-service of the Order-in-Original.

The Customs Department disputed the appellants’ contention that the adjudication order had not been communicated.

The Department placed on record material showing that the Order-in-Original had been dispatched to the address available on record and had also been sent by electronic mail on December 14, 2021 to the counsel/authorised representative who had represented the appellants during the adjudication proceedings. A corrigendum was also forwarded electronically on December 22, 2021.

The Department additionally relied upon the display of the order on the notice board of the concerned office under Section 153(e) of the Customs Act.

The Department therefore argued that the appellants could not simply rely upon their later receipt of the order in July 2024 to explain a delay extending over several years.

An important circumstance considered by CESTAT was the fact that the same counsel who had represented the appellants during adjudication had received the Order-in-Original through email.

The Tribunal, by an order dated September 29, 2025, specifically directed the concerned counsel to explain why the email communications dated December 14 and December 22, 2021 had not been disclosed in the applications seeking condonation of delay. The Tribunal also sought clarification as to whether the appellants had been informed about receipt of the adjudication order.

No communication or affidavit from the concerned counsel was filed in response to the Tribunal’s direction. Instead, an affidavit was filed by the partner of the appellant firm reiterating that the appellants themselves had not received the order and were unaware of the email communication to their counsel.

CESTAT ultimately rejected the applications for condonation of delay by its common Miscellaneous Order Nos. 50042–50044/2026 dated January 7, 2026 and consequently dismissed the three appeals.

The High Court first emphasised that its jurisdiction under Section 130 of the Customs Act is restricted to cases involving a “substantial question of law”.

The Court referred to the Supreme Court’s decision in Santosh Hazari v. Purushottam Tiwari and explained that a substantial question of law must be a question of substance that is debatable and materially affects the rights of the parties and outcome of the case.

A mere request for re-appreciation of evidence or substitution of the Tribunal’s factual assessment with another possible view does not ordinarily satisfy the statutory threshold. A factual finding may, however, give rise to a substantial question of law where it is perverse, unsupported by evidence, arrived at by ignoring material evidence or founded on an erroneous application of law.

The Court noted that Section 129A(3) of the Customs Act prescribes three months for filing an appeal before CESTAT from the date on which the order sought to be appealed against is communicated.

Under Section 129A(5), CESTAT has the power to admit an appeal after expiry of the prescribed period where it is satisfied that there was “sufficient cause” for the failure to present the appeal within time.

The High Court stressed that this discretion has to be exercised judicially and requires consideration of the explanation offered for the entire period of delay, rather than merely the period immediately preceding the filing of the appeal.

The Court acknowledged that the expression “sufficient cause” should receive a liberal and justice-oriented interpretation. However, such an approach does not eliminate the requirement of bona fides, diligence and a satisfactory explanation for the delay.

Referring to Esha Bhattacharjee v. Managing Committee of Raghunathpur Nafar Academy, the Court noted that a liberal approach may be justified where the explanation reflects bona fide circumstances, but not where there is gross negligence, lack of due diligence or want of bona fides.

The Bench also relied upon Basawaraj v. Special Land Acquisition Officer, reiterating that limitation provisions must ordinarily be enforced as enacted and that courts cannot extend statutory limitation merely on equitable considerations.

The High Court found the appellants’ conduct during and after adjudication to be particularly significant.

The record showed that the appellants were aware of the adjudication proceedings and had engaged counsel to represent them. Despite repeated opportunities, no reply to the Show Cause Notice was filed and the adjudication ultimately concluded in December 2021.

More importantly, the appellants did not produce material demonstrating that they had made any enquiry regarding the outcome of the proceedings between December 2021 and February 2024.

The Court observed that even if the appellants themselves had not received the adjudication order in December 2021, their explanation still had to account for the prolonged period during which they made no enquiry about proceedings in which they admittedly knew they were involved.

The High Court also considered the Department’s electronic communication of the Order-in-Original to the counsel who had represented the appellants.

The Tribunal had found that the email communication to counsel could not be viewed in isolation. The Department had also attempted postal communication and had displayed the order on its notice board. The Tribunal took into account the fact that the counsel had previously been corresponding with the Principal Commissioner during adjudication proceedings.

The High Court held that the Tribunal’s decision was based on a cumulative assessment of the surrounding circumstances, rather than solely on the fact that the order had been emailed to counsel.

The appellants argued that they should not suffer because their counsel allegedly failed to communicate the adjudication order to them.

The High Court acknowledged the principle recognised by the Supreme Court in Rafiq v. Munshilal that an innocent litigant who has acted diligently should not ordinarily suffer merely because of a default by counsel.

However, the Bench found the facts materially different. According to the Court, this was not a case where the litigants themselves had acted diligently and were prejudiced solely by their counsel’s omission.

The appellants had participated in the adjudication proceedings through counsel and then remained inactive for nearly three years without enquiring about the outcome. Consequently, the alleged failure of counsel to communicate the order could not, by itself, explain the entire period of delay.

The Court also considered another circumstance relied upon by CESTAT.

Although the appeals were filed before CESTAT on August 1, 2024, the applications seeking condonation of delay were not filed simultaneously. They were filed only on December 20, 2024, after the Registry pointed out the delay.

The Tribunal noted that the same counsel who had represented the appellants before the Principal Commissioner had also filed the appeals and applications before CESTAT.

The Tribunal had thereafter specifically asked the counsel to explain the non-disclosure of the email communication and whether the order had been conveyed to the appellants. No response was submitted.

The High Court treated these circumstances as relevant to assessing whether the appellants had demonstrated bona fide diligence sufficient to justify condonation of the extraordinary delay.

A crucial aspect of the judgment is the Court’s distinction between receipt of the order in July 2024 and the appellants’ conduct during the preceding period.

The Bench held that the subsequent receipt of the Order-in-Original on July 2, 2024 and filing of appeals on August 1, 2024 could not, by themselves, cure the preceding prolonged inaction.

The Court observed that knowledge acquired by a duly appointed counsel during representation remained a relevant circumstance when assessing the appellants’ diligence and the existence of sufficient cause for condonation.

Ultimately, the High Court concluded that the CESTAT had properly exercised its discretion after examining the material on record.

The Bench found no indication that CESTAT had ignored material evidence, applied an erroneous legal principle or arrived at a perverse conclusion. The appellants’ challenge essentially sought a re-appreciation of the factual circumstances and substitution of the Tribunal’s discretionary assessment with another possible view.

Such an exercise, the Court held, was impermissible under Section 130 unless the Tribunal’s findings were shown to be perverse or otherwise gave rise to a substantial question of law.

In the concluding portion of the judgment, the Delhi High Court held that the CESTAT did not give rise to any substantial question of law warranting interference.

The Court held that the appellants had failed to demonstrate sufficient cause for the approximately 968-day delay in approaching CESTAT. Their subsequent receipt of the adjudication order on July 2, 2024 and the steps taken thereafter did not satisfactorily explain the prolonged period of inaction preceding that receipt.

Accordingly, all three Customs Appeals were dismissed, and the pending applications were also disposed of.

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