2014 (7) TMI 829 - AT - Service Tax

Extension of stay order - power of tribunal to extend stay beyond 365 days - appeals could not be disposed of within time specified in Section 35C (2A) - Held that - High Court ruling in Maruti Suzuki (2014 (2) TMI 1037 - DELHI HIGH COURT) declare this legal position unequivocally; and after analysis of the amended provisions of the Income Tax Act (which are in pari materia provisions of the Excise Act) and duly considering the judgement of the Supreme Court in Kumar Cotton Mills Pvt. Ltd. 2005 (1) TMI 114 - SUPREME COURT OF INDIA - In light of exposition of the legal position qua the judgement in Maruti Suzuki it must be concluded that the provisions of Section 35C (2A) of the Central Excise Act eviscerate the power of (CESTAT) to extend operation of a stay granted and extended beyond a total period of 365 days. Delhi High Courts distinguished the judgement of the Bombay High Court in Income Tax Vs. Ronak Industries - 2010 (11) TMI 461 - Bombay High Court which followed its earlier judgment in Narang Overseas P. Ltd. Vs. ITAT & Others - 2007 (7) TMI 5 - HIGH COURT BOMBAY - Extension of stay denied.

Summary

Issues:
Extension of operation of stay granted on 28.2.2013 due to delayed disposal of appeals.

Analysis:
The applications sought extension of the stay granted on 28.2.2013, citing non-disposal of appeals within the time specified in Section 35C(2A) of the Central Excise Act, 1944, and no fault on the part of the petitioners/appellants.

The stay applications in the two appeals were disposed of through a common order, requiring pre-deposit of specific amounts and compliance reporting by a set date, with the balance demand stayed during the pendency of the appeals.

Reference was made to judgments of the Supreme Court and the Tribunal to support the extension of the stay, while the Learned DR referred to decisions of the Karnataka and Delhi High Courts, highlighting the limitations on granting extensions beyond the specified tenure limits.

The High Court rulings in Bose Corporation and Maruti Suzuki emphasized the legislative limits on extending stays beyond 365 days as per Section 35C(2A) of the Central Excise Act, aligning with the principles set out in the Supreme Court's judgment in Kumar Cotton Mills Pvt. Ltd.

Considering the legal position established by the High Court rulings and the statutory provisions, the applications for extension were dismissed as the stay granted on 28.2.2013 stood vacated beyond the permissible 365-day period.