2013 (11) TMI 1021 - AT - Central Excise

Applications for extension of stay already granted Held that - The third proviso to Section 35C (2A) of the Central Excise Act, 1944 was inserted by Finance Bill, 2013, in the context of such appeal is not disposed of within the period specified in the first proviso of the said Section, which was inserted by Finance Bill, 2002 Following CCE, Ahmedabad Vs. Kumar Cotton Mills Pvt. Ltd. 2005 (1) TMI 114 - SUPREME COURT OF INDIA - after considering the periods as specified in proviso to sub-section (2A) held that the Tribunal has power to extend stay after specified period - There is a direction that pre-deposit of the balance amount shall remain waived during the pendency of the appeal application for extension of stay already granted allowed Decided in favour of Assessee.

Summary

Issues:
Extension of stay orders beyond stipulated period under Section 35C of Central Excise Act, 1944.

Analysis:

1. Preliminary Objection by AR:
The learned AR raised a preliminary objection regarding the extension of stay orders beyond the stipulated period of 365 days under the amended Section 35C by Finance Act, 2013. Citing the case of CCE Vs. SRF Ltd., the AR argued that no further extension can be granted beyond the specified period. He emphasized the limitations imposed by the Finance Act, 2013, and the Tribunal's power to grant stay for a maximum of 180 days only.

2. Appellant's Submission:
The appellant's counsel countered the AR's objection by referring to the Supreme Court's decision in the case of Kumar Cotton Mills Pvt. Ltd. The counsel highlighted a specific direction in the stay order dated 1.2.2012, which waived the predeposit of the balance amount during the appeal's pendency. Additionally, the counsel pointed out a previous rejection of a similar objection by the Tribunal in the case of PCS Technology Ltd. Vs. CCE, Puducherry.

3. Tribunal's Decision:
After considering both arguments and reviewing the records, the Tribunal referred to the case of PCS Technology Ltd. and the introduction of sub-section (2A) of Section 35C by Finance Act, 2002. The Tribunal noted the Supreme Court's interpretation in the Kumar Cotton Mills case, emphasizing that the sub-section should not penalize assesses for matters beyond their control. The Tribunal held that the power to extend stay orders exists even after the insertion of the third proviso to sub-section (2A) by the Finance Bill, 2013.

4. Rejection of Preliminary Objection:
The Tribunal rejected the preliminary objection raised by the AR, citing the absence of the Kumar Cotton Mills case in the SRF Ltd. decision and the specific direction in the present case's stay order. Consequently, the miscellaneous applications for extension of stay orders were allowed, overriding the AR's objection.

5. Conclusion:
In conclusion, the Tribunal upheld the appellant's right to seek an extension of stay orders beyond the stipulated period, based on the legal interpretations provided by the Supreme Court's decision in the Kumar Cotton Mills case. The Tribunal's decision in this matter aligned with the principles of fairness and the need to consider circumstances beyond the control of the assesses when dealing with stay extensions under Section 35C of the Central Excise Act, 1944.

This detailed analysis of the judgment highlights the arguments presented by both parties, the legal precedents cited, and the Tribunal's decision regarding the extension of stay orders under Section 35C of the Central Excise Act, 1944.