2014 (8) TMI 737 - HC - Central Excise

Power of tribunal to grant stay beyond the total period of 365 days - extension of stay granted earlier - extension order should be speaking or not - Held that -in case and having satisfied that delay in not disposing of the appeal within 365 days (total) from the date of grant of initial stay is not attributable to the appellant / assessee in whose favour stay has been granted and that the Appellate Tribunal is satisfied that such appellant / assessee has fully cooperated in early disposal of the appeal and/or has not indulged into any delay tactics and/or has not taken any undue advantage, the learned Appellate Tribunal may, by passing a speaking order as observed hereinabove, extend stay even beyond the total period of 365 days from the date of grant of initial stay. However, as observed by the Hon ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (2005 (1) TMI 114 - SUPREME COURT OF INDIA), it should not be construed that any latitude is given to the Appellate Tribunal to extend the period of stay except on good cause and if the Appellate Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Appellate Tribunal for the reasons not attributable to the assessee. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. On expiry of every 180 days the concerned assessee / appellant is required to submit an appropriate application before the learned Appellate Tribunal to extend the stay granted earlier and the Appellate Tribunal may extend the stay for a further period but not beyond 180 days at a stretch and on arriving at the subjective satisfaction, as stated hereinabove, the Appellate Tribunal may extend the stay even beyond 365 days from the date of grant of initial stay and even thereafter. - Thus, on expiry of maximum period of 180 days the assessee / appellant is required to submit application for extension of stay each time and the Appellate Tribunal is required to consider the individual case and pass a speaking order, as stated hereinabove. - Following decision of Commissioner Versus Small Industries Development Bank of India 2014 (7) TMI 738 - GUJARAT HIGH COURT - Matter remanded back - Decided partly in favor of revenue.

Summary

Issues:
1. Extension of stay beyond 365 days by Customs, Excise and Service Tax Appellate Tribunal.
2. Requirement of separate consideration for each matter in extending stay.

Analysis:
1. Extension of Stay Beyond 365 Days:
The appellant challenged the Customs, Excise and Service Tax Appellate Tribunal's decision to extend the stay granted beyond 365 days, citing a violation of Section 35C(2A) of the Central Excise Act, 1944. The High Court referred to a previous judgment where it was held that the Tribunal could extend the stay beyond 365 days if the delay was not due to the appellant and the Tribunal was satisfied with the appellant's cooperation. However, this extension should only be based on good cause, and the Tribunal must review the situation every 180 days. The Court directed the Tribunal to maintain a separate register for cases with stay orders and prioritize their disposal. The Court held in favor of the appellant on this issue.

2. Separate Consideration for Each Matter in Stay Extension:
The Court addressed the issue of passing a common non-speaking order for stay extension when each matter should be considered independently. It was held that the Tribunal must pass a speaking and reasoned order when extending stay, and all matters were remanded to the Tribunal for fresh orders within two months. The stay order was to continue for an additional two months to prevent the applications from becoming infructuous. The Court ruled in favor of the revenue department on this issue.

In conclusion, the High Court allowed the appeal partly, remitting the matter back to the Appellate Tribunal for fresh orders in line with the Court's observations. The Tribunal was directed to pass speaking orders for stay extensions within two months, ensuring the stay orders continued for an additional two months. The Court emphasized the need for timely disposal of appeals, especially those with stay orders against the revenue.