2013 (9) TMI 627 - AT - Service Tax

Application u/s 35C(2) seeking review of stay order Held that - Any application under sub-section (2) of the Section 35C purported to seek amendment of an order passed under sub-section (1) - The stay order was not passed under sub-section (1) of Section 35C - It was passed under Section 35F of the Central Excise Act - In this view of the matter, the present application is not maintainable in law. Power of Review Held that - The power of review, oft-referred to by the learned counsel, was limited insofar as an application for modification of stay order passed by this Tribunal is concerned Following Baron International Ltd. vs. Union of India 2003 (9) TMI 97 - HIGH COURT OF JUDICATURE AT BOMBAY - the Tribunal should first make a prima facie enquiry to find out whether sufficient materials existed warranting modification of the stay order passed under Section 35F of the Central Excise Act - If no such prima facie case was found, the modification application should be rejected without elaborate hearing - If prima facie case existed warranting modification of stay order, only then the Tribunal should hear both sides elaborately on the modification application. waiver of Pre-deposit - All the submissions made before the Bench from both sides were correctly and completely recorded direction was made for the pre deposits to be made -The plea of financial hardships which was seen reiterated in the Managing Partner s Affidavit Partial stay granted.

Issues:
1. Review of Stay Order under Section 35C(2) of the Central Excise Act.
2. Scope of modification of stay order passed by the Appellate Tribunal.
3. Applicability of Section 35C(2) of the Central Excise Act to the present proceedings.
4. Limitations on the power of review for modification of stay orders.
5. Consideration of financial hardships in directing pre-deposit amount.

Analysis:
1. The appellant filed an application seeking a review of Stay Order No. 1797/2012 directing a pre-deposit of Rs. 20 lakhs under Section 35C(2) of the Central Excise Act. The appellant argued that crucial facts were not highlighted during the initial hearing, leading to financial hardships. The appellant's counsel contended that the Tribunal has inherent power to review and modify the stay order based on the appellant's plea regarding service tax payments made in the past. The respondent, however, argued that all submissions were duly noted in the stay order, citing a relevant case law.

2. The Tribunal noted that the stay order was passed under Section 35F of the Central Excise Act, not under Section 35C(1). Therefore, the application for review under Section 35C(2) was deemed not maintainable. Additionally, the power of review for modification of stay orders is limited. The Tribunal referenced a case where it was held that a prima facie enquiry should be conducted to determine if there are sufficient grounds for modification. If no prima facie case exists, the modification application should be rejected without elaborate hearing.

3. The Tribunal emphasized that the appellant had the option to appeal the stay order to the jurisdictional High Court if still aggrieved, as review is not a statutory remedy. The Tribunal rejected the miscellaneous application and granted the appellant eight weeks to pre-deposit the balance amount of Rs. 15 lakhs for the sake of justice. Compliance was to be reported by a specified date.

4. In conclusion, the Tribunal clarified the limitations on the power of review for modification of stay orders, the proper procedure for seeking modification, and the availability of statutory remedies such as appealing to the High Court. The judgment highlighted the importance of adhering to legal provisions and procedures while considering financial hardships in such matters.

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