2016 (4) TMI 62 - HC - Central Excise

Order of stay passed by the Customs, Excise and Service Tax Appellate Tribunal - whether order would continue to be operative after expiry of 365 days as provided under section 35C(2A) of the Central Excise Act, 1944 ? - Held that - The inherent power to do justice will be exercised depending upon the conduct of the assessee-appellant in individual matters. In the event after obtaining the interim order and relief, the assessee-appellant deliberately and intentionally delays the hearing of the appeals, then, the consequences in the legal provision would follow. In that event, the assessee will have to convince the Tribunal to continue the interim order / relief in his or her favour. Once it is agreed by both sides that such is the statement of law, then, none of these appeals need be entertained. All the more when the proviso to section 35C(2A) styled as the second proviso has been deleted by Finance Act No.2 of 2014. Hence, it is not necessary to entertain any of these appeals. They are disposed of at the stage of admission in the light of the clear legal provision.

Summary

Issues:
Interpretation of the continuation of an order of stay by the Customs, Excise and Service Tax Appellate Tribunal after the expiry of 365 days as per section 35C(2A) of the Central Excise Act, 1944.

Analysis:

The High Court of Bombay, comprising Judges S. C. Dharmadhikari and G. S. Patel, deliberated on the substantial question of law regarding the operative nature of an order of stay issued by the Customs, Excise and Service Tax Appellate Tribunal after the prescribed 365-day period under section 35C(2A) of the Central Excise Act, 1944. The Court noted that the issue had been settled through various judgments, including those from the Court itself, emphasizing that the Tribunal's authority remains intact despite the statutory limitation. The Court highlighted that the Tribunal retains the inherent power to ensure justice based on the conduct of the assessee-appellant in each case. It was emphasized that if the assessee-appellant intentionally delays the appeal proceedings after obtaining interim relief, they must justify to the Tribunal the need for the continuation of the interim order in their favor.

Moreover, both parties acknowledged the settled legal position on this matter, rendering the need to entertain the appeals unnecessary. The Court pointed out that the second proviso to section 35C(2A) had been eliminated by the Finance Act No.2 of 2014, further solidifying the conclusion that there was no requirement to proceed with the appeals. Consequently, the Court disposed of all appeals at the admission stage in adherence to the explicit legal provisions, with no costs imposed on either party.