2015 (10) TMI 689 - HC - Central Excise

Waiver of pre deposit - Held that - There is a fundamental fallacy in the submission of the Revenue. Sub-section (2A) of Section 35-C of the Act requires the Tribunal to endeavour to dispose of the appeal within the stipulated period as set out therein. The first proviso provides that where an order of stay has been passed, the Tribunal shall dispose of the appeal within a period of 180 days from the date of the order. Under the second proviso, if the appeal is not disposed of within the period specified in the first proviso, the stay order shall stand vacated. Hence, the provisions which are contained in the second proviso to Section 35-C (2A) of the Act operate as a matter of law. In that view of the matter, it cannot be held that the Tribunal in passing the order of stay has acted in violation of the provisions of the second proviso to Section 35-C (2A) of the Act. - No substantial question of law arises - Decided against Revenue.

Summary

Issues involved:
- Appeal by the Revenue arising from an order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on an application for waiver of pre-deposit.

Detailed Analysis:
The appeal by the Revenue was based on the Tribunal's decision to grant a waiver of pre-deposit of the assessed demand in favor of the respondents during the pendency of the appeal. The Revenue contended that this action extended the period of stay beyond 365 days, contrary to the recent amendment to section 35-C (2A) of the Central Excise Act, 1944. The Revenue argued that the Tribunal was bound to specify the time limit of stay, not exceeding 180 days in the first instance and 185 days in the second instance, with a total extension not exceeding 365 days. However, the Court found a fundamental fallacy in the Revenue's submission. The Court highlighted that sub-section (2A) of Section 35-C of the Act required the Tribunal to endeavor to dispose of the appeal within the stipulated period. The first proviso mandated that if an order of stay was passed, the appeal should be disposed of within 180 days. The second proviso stated that if the appeal exceeded the specified period, the stay order would stand vacated. The Court emphasized that these provisions operated as a matter of law, and the Tribunal did not violate the law by granting the stay order.

The Court concluded that the appeal by the Revenue did not raise any substantial questions of law. However, the Court directed the Tribunal to expedite the disposal of the appeal in compliance with the mandate of Section 35-C (2A) of the Act. The appeal was ultimately dismissed, with no order as to costs. The judgment clarified the legal interpretation of the provisions regarding the time limit for disposal of appeals and the validity of stay orders, providing guidance for future cases involving similar issues.