2014 (12) TMI 1147 - HC - Central Excise

Stay application - Held that - Appellate Tribunal will endeavour to decide the appeal within a period of three years from the date it is filed. The significance of the words where it is possible to do so cannot be lost site of in interpreting the provision. The statutory provision is therefore not a complete embargo that under all circumstances, notwithstanding any other issue involved, stay has to be mandatorily vacated. In other words, the statutory provision is itself discretionary in nature and its operation would depend upon the facts and circumstances of each case. If the assessee after obtaining stay plays truant to delay disposal, the statutory provision can certainly be invoked. It cannot be invoked if the respondents play truant to delay disposal so that the statutory period would lapse, stay would have to be vacated and the appeal rendered futile. If despite diligence on the part of the appellant, the Tribunal has not been able to take up the appeal due to pressure of pendency of cases, stay cannot be vacated. Any interpretation to the contrary shall be doing complete violence to the statutory provisions and has to be rejected. The Tribunal itself states that the appeals of earlier years were pending and therefore, it has not been able to decide appellant s appeal. The appellant was not at fault. It is trite law that the act of the Court can prejudice none stated in the maxim actus curiae neminem gravabit. The delay in disposal of the appeal is attributable to circumstances beyond the control of the Tribunal and not to the assessee. - The impugned order dated 16-6-2014 vacating the stay on ground that the statutory period of stay without adjudication had expired is set aside and the application filed by the appellant for extension of stay order is allowed. - Decided in favour of assessee.

Summary

Issues:
Appeal against disallowance of CENVAT Credit and penalty under CENVAT Credit Rules, 2004 - Stay of order vacated due to expiry of statutory period under Section 35C(2A) of the Central Excise Act, 1944 - Appellant's contention of not being at fault in delay of disposal - Interpretation of statutory provision and discretion of the Tribunal - Extension of stay order and disposal of appeal.

Analysis:
The judgment dealt with an appeal against the disallowance of CENVAT Credit and imposition of penalty under the CENVAT Credit Rules, 2004. The appellant was issued a show cause notice regarding the disallowed credit, and after proceedings, the Tribunal granted relief of waiver of pre-deposit and allowed the stay application. However, the stay was vacated on the ground that the statutory period of 365 days for which stay could remain operative had expired, as per Section 35C(2A) of the Central Excise Act, 1944.

The appellant contended that the delay in disposal of the appeal was not attributable to them, as evident from the Tribunal's own acknowledgment in the order. The appellant argued that the Tribunal should have considered the circumstances beyond their control that led to the delay. The respondent, on the other hand, emphasized compliance with statutory provisions, stating that the Tribunal had no option but to vacate the stay as per the law.

The Court analyzed Section 35C(2A) and highlighted the discretionary nature of the provision, emphasizing that the Tribunal must consider the facts and circumstances of each case before vacating the stay. The Court noted that if the delay in disposal was due to the Tribunal's backlog rather than the appellant's actions, the stay should not be vacated. The principle of actus curiae neminem gravabit was invoked to emphasize that the Court's actions should not prejudice any party.

Ultimately, the Court set aside the order vacating the stay and allowed the appellant's application for an extension of the stay order. The Tribunal was directed to dispose of the appeal promptly, subject to cooperation from both parties. The judgment clarified that the present order should not be seen as a complete restriction on the Tribunal's discretion regarding stay matters, leaving room for future decisions based on subsequent facts and in accordance with the law. The appeal was allowed in favor of the appellant.