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2018 (1) TMI 500 - HC - CustomsWhether the Customs, Excise and Service Tax Appellate Tribunal has no more jurisdiction to entertain an Application for stay of the order impugned before it? Held that - the Appellate Tribunal dealing with an appeal under the Customs Act has incidental or ancillary powers to grant appropriate interim relief. As appellate jurisdiction has been conferred on the Appellate Tribunal, by necessary implication, in a given case, the Appellate Tribunal has power to grant appropriate interim relief. The interim relief can be granted where, in a given case, the order impugned is very harsh and prima facie illegal. The interim relief can be granted in various circumstances including in a case where the failure to grant interim relief may render the appellate power nugatory. The Tribunal can always impose conditions for balancing the interests of the revenue and the assessee and for ensuring that that the amount of demand is secured in some form. The application bearing No.C/MA(Ors)94791/15 dated 28th August 2015 is restored to the file of the Customs, Excise and Serviced Tax Appellate Tribunal, West Zonal Bench, Mumbai - appeal allowed in part.
Issues Involved:
1. Jurisdiction of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) to entertain an application for stay of the order impugned before it. Detailed Analysis: Jurisdiction of CESTAT to Entertain Stay Applications: The core issue was whether the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has the jurisdiction to entertain an application for stay of the order impugned before it. The appeal arose from an order where the petitioner was directed to pay a redemption fine for confiscated goods and sought a stay on this requirement. Relevant Factual Background: - The Commissioner of Customs had confirmed a demand for differential duty and imposed a penalty on the petitioner. - The petitioner complied with the mandatory deposit of 7.5% of the duty and penalty as per Section 129E of the Customs Act, 1962. - The petitioner applied to CESTAT for a stay on the redemption fine, which was rejected on the grounds that the Tribunal lacked the power to entertain such an application. Petitioner's Argument: - The petitioner argued that CESTAT has inherent powers to grant interim relief, including staying the recovery of the redemption fine, under Rule 41 of the Customs, Excise, and Service Tax Appellate Tribunal (Procedure) Rules, 1982. - Cited various decisions supporting the inherent powers of appellate authorities to grant interim relief. Respondent's Argument: - The respondent contended that after the amendment to Section 129E, once the appellant complies with the deposit requirement, no further steps can be taken to recover the balance amount of duty and penalty until the appeal is disposed of. - Argued that there is no express provision in the Act or Procedure Rules granting CESTAT the power to grant interim relief. Court's Consideration: - The court examined the powers of CESTAT under Rule 41 and various precedents, including the decision in Venugopal Engineering Ltd. v. Union of India, which supported the inherent power of CESTAT to grant stay in exceptional circumstances. - Referenced the Supreme Court's decision in Income-Tax Officer, Cannanore v. M.K. Mohammed Kunhi, which recognized the appellate tribunal's power to grant stay as incidental or ancillary to its appellate jurisdiction. - Highlighted that the statutory power of CESTAT includes making orders necessary to secure the ends of justice, and this extends to granting interim relief in appropriate cases. Conclusion: - The court concluded that CESTAT does possess the jurisdiction to grant interim relief, including staying the recovery of redemption fines, as part of its appellate powers. - Emphasized that such power should be exercised judiciously and only in cases where a strong prima facie case is made out to prevent the appeal from being rendered nugatory. Order: 1. The impugned order dated 18th April 2016 was quashed and set aside. 2. The application for stay was restored to the file of CESTAT, West Zonal Bench, Mumbai, to be decided afresh in light of the court's judgment. 3. CESTAT was requested to decide the application expeditiously, preferably within three months. 4. All contentions on the merits of the application were kept open. 5. The appeal was partly allowed with no order as to costs. This judgment clarifies the extent of CESTAT's powers to grant interim relief and underscores the importance of balancing the interests of revenue and the assessee.
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