2014 (12) TMI 778 - HC - Central Excise

Power of Tribunal to extend stay beyond the period of 365 days - non-speaking order for extension of stay - Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in granting extension of stay beyond 365 days by ignoring specific provision contained in third proviso to section 35C(2A) of the Central Excise Act, 1944 - Held that - Following decision of Commissioner Versus Small Industries Development Bank of India 2014 (7) TMI 738 - GUJARAT HIGH COURT - Question No.1 is held in favour of the assessee and against the revenue and Question No.2 is answered in favour of the revenue and against the assessee. The matter is remanded to the learned Appellate Tribunal to pass a fresh speaking order on the application submitted by the assessee to extend the stay granted earlier - Decided partly in favour of Revenue.

Summary

Issues:
Extension of stay beyond 365 days from the date of initial grant; Requirement of speaking order for extension of stay by the Appellate Tribunal.

Analysis:

Issue 1: Extension of stay beyond 365 days
The appellant challenged the order of the Customs, Excise and Service Tax Appellate Tribunal, which extended the stay granted beyond 365 days from the initial grant date. The appellant raised a substantial question of law regarding the Tribunal's authority to extend the stay beyond the prescribed limit. The High Court referred to a previous decision in Tax Appeal No.341 of 2014 and other allied Tax Appeals, where it was held that the Tribunal could extend the stay beyond 365 days if the delay was not attributable to the appellant, and the appellant cooperated in the appeal process. However, the Tribunal must review the situation every 180 days and consider each application for extension of stay individually. The Court emphasized that the Tribunal should prioritize cases where stay is granted against the revenue and dispose of appeals promptly. The High Court held in favor of the appellant on this issue.

Issue 2: Requirement of speaking order for extension of stay
The High Court addressed the requirement of a speaking order by the Appellate Tribunal when extending a stay. The Court held that the Tribunal must pass a speaking and reasoned order while extending the stay. In the present case, the Court found that the Tribunal had not provided a speaking order for the extension of stay, leading to a remand of all matters back to the Tribunal. The Court directed the Tribunal to pass appropriate orders within two months from the date of the judgment. During this period, the extended stay order would continue, and the Tribunal was urged to dispose of the appeals promptly. The High Court ruled in favor of the revenue department on this issue.

In conclusion, the High Court partly allowed the appeal, holding in favor of the appellant on the extension of stay beyond 365 days issue and in favor of the revenue department on the requirement of a speaking order issue. The matters were remitted back to the Appellate Tribunal for fresh orders in line with the Court's observations, emphasizing the importance of timely disposal of appeals and proper documentation of decisions.