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2014 (9) TMI 713 - HC - Central ExciseWaiver 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 - 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 - waiver of pre-deposit will continue to remain valid for a period of six months - Following decision of Commissioner, Central Excise, Kanpur Vs. M/s J.P. Transformers 2013 (10) TMI 1194 - ALLAHABAD HIGH COURT - Appeal disposed of.
Issues:
1. Extension of stay beyond 365 days due to waiver of pre-deposit. 2. Interpretation of Section 35C (2A) of the Central Excise Act, 1944 regarding the grant of waiver of pre-deposit indefinitely. Analysis: Issue 1: Extension of stay beyond 365 days due to waiver of pre-deposit The appeal by the Revenue challenged the order of the Customs, Excise & Service Tax Appellate Tribunal granting waiver of pre-deposit beyond 365 days during the pendency of the appeal. The Revenue contended that this extension was in violation of the recent amendment to section 35-C of the Central Excise Act, 1944. The Tribunal had granted the extension due to the backlog of older appeals. The Division Bench referred to a previous judgment where it was held that granting waiver of pre-deposit indefinitely defeats the purpose of the law. The Tribunal noted that the delay in disposing of the appeal was due to the backlog of cases and not the fault of the assessee. The High Court directed the Tribunal to expedite the disposal of the appeal within six months, and the waiver of pre-deposit was to remain valid for that period. Issue 2: Interpretation of Section 35C (2A) regarding waiver of pre-deposit The Division Bench referred to the Supreme Court's decision in a similar case where it was emphasized that the Tribunal should not extend the period of stay arbitrarily but only on good cause and if satisfied that the delay was not attributable to the assessee. The Division Bench reiterated that granting waiver of pre-deposit indefinitely goes against the purpose of the law. The High Court upheld this interpretation and directed the Tribunal to decide the appeal expeditiously within six months while maintaining the validity of the waiver of pre-deposit for the same period. The questions of law were answered in line with the previous judgments, and the appeal was disposed of with no order as to costs. In conclusion, the High Court clarified the limitations on extending the waiver of pre-deposit and emphasized the need for expeditious disposal of appeals to prevent indefinite extensions of stay orders. The judgment reaffirmed the importance of adhering to statutory timelines and ensuring that delays in proceedings are not unjustly attributed to the assessee.
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