2014 (9) TMI 666 - HC - Central Excise

Waiver of pre deposit - Whether the Hon ble CESTAT erred in granting waiver of pre-deposit of assessed demand in favour of the respondents during pendency of the appeal thereby extending the period of stay beyond 365 days ignoring the recent amendment to section 35-C of the Central Excise Act, 1944, made through enactment of Finance Bill, 2013 - Held that - Tribunal has noted that a waiver of pre-deposit and unconditional stay on the realisation of the adjudicated liability was granted by the Tribunal since a prima facie case was found in favour of the assessee. The Tribunal has also observed that the appeal has not been disposed of only on account of the pendency of several older appeals and not on account of any delay on the part of the assessee - the ends of justice would be met if the Tribunal is requested to dispose of the appeal expeditiously and preferably within a period of six months. The waiver of pre-deposit will continue to remain valid for a period of six months - Decided partly in favour of Revenue.

Summary

Issues:
1. Interpretation of Section 35C (2A) of the Central Excise Act, 1944 regarding the extension of stay beyond 365 days.
2. Application of recent amendments to the Act concerning waiver of pre-deposit during the pendency of appeals.

Analysis:

Issue 1: Interpretation of Section 35C (2A) regarding the extension of stay beyond 365 days
The High Court considered the appeal by the Revenue challenging the order of the Customs, Excise & Service Tax Appellate Tribunal granting waiver of duty demand, interest, and penalty, along with extending the stay period beyond 365 days. The questions of law raised by the Revenue focused on whether the Tribunal erred in extending the stay period beyond 365 days, disregarding the recent amendment to Section 35C of the Act. The Court referred to the provisions of Section 35C (2A) which mandate the disposal of appeals within specific timeframes, emphasizing that the stay order shall stand vacated if the appeal is not disposed of within the specified period.

Issue 2: Application of recent amendments concerning waiver of pre-deposit during appeal
The High Court analyzed the recent amendments to the Act, particularly the insertion of sub-section 2A in Section 35C by the Finance Act, 2013. The Court referred to a previous judgment where the purpose of the amendment was discussed, highlighting that granting waiver of pre-deposit indefinitely would defeat the legislative intent. The Court emphasized that while considering appeals, the Tribunal should ensure expeditious disposal within the stipulated timeframes to prevent indefinite extension of stay orders. The Court directed the Tribunal to decide the appeal expeditiously, preferably within six months, and clarified that the waiver of pre-deposit would remain valid for the specified period.

In conclusion, the High Court disposed of the appeal, aligning its decision with the interpretation of the law provided in previous judgments. The Court emphasized the importance of timely disposal of appeals to uphold the legislative intent behind the amendments to prevent indefinite extensions of stay orders. The Court's decision aimed to balance the interests of the parties while ensuring compliance with statutory provisions.