2003 (10) TMI 356 - AT - Central Excise

Summary

Issues involved:
1. Extension of stay order beyond 180 days by the Tribunal.
2. Interpretation of Section 35F of the Central Excise Act regarding the Tribunal's power to grant stay of recovery during the appeal.
3. Effect of Section 35C(2A) on the continuation of stay beyond 180 days.
4. Prejudice to the appellants due to pendency issues at Mumbai Bench.
5. Conflict in interpretation of provisions of Section 35C(2A) leading to the referral to the Larger Bench for resolution.

Detailed Analysis:
1. The Tribunal considered the applications for extension of stay orders beyond 180 days, noting earlier decisions allowing such extensions. However, a recent decision by the Tribunal rejected such applications. The Tribunal analyzed the power to grant stay of recovery during appeals, emphasizing the need to prevent rendering orders under Section 35F ineffective due to recovery actions by the Department.

2. Section 35F of the Central Excise Act empowers the Tribunal to waive pre-deposit conditions if the appellant has a prima facie case and would face financial hardship. While the Act does not specifically grant power to stay recovery during appeals, the Tribunal, through inherent powers, can do so to ensure the effectiveness of dispensing with pre-deposit conditions under Section 35F.

3. The Tribunal discussed the effect of Section 35C(2A), noting that the stay order automatically vacates if the appeal is not decided within 180 days. However, there is no explicit restriction on the Tribunal's inherent power to extend the stay beyond this period. The Tribunal disagreed with a previous decision citing a Supreme Court case, stating it was not applicable in this context.

4. Pendency issues at the Mumbai Bench led to difficulties in timely disposal of appeals, affecting the applicants. The Tribunal emphasized that applicants in Mumbai should not suffer due to these issues and that the Tribunal should exercise its inherent powers to grant extensions beyond 180 days to prevent prejudice.

5. Due to conflicting interpretations on the extension of stay orders, the Tribunal referred the matter to the Honorable President for consideration by the Larger Bench to achieve uniformity in approach across all Benches. This referral aimed to resolve the conflict in interpreting Section 35C(2A) and ensure consistency in decision-making on this issue.