2013 (4) TMI 206 - AT - Central Excise

Unconditional stay - Recovery in view of 35C ( 2A ) - Whether on expiry of six months from the date of stay order, the Appellant is required to file an application for extension of stay - Held that - For the period subsequent to the insertion of the Second Proviso the Tribunal should, as a matter of practice, specify the time period during which the stay shall operate after exercising its judicial discretion. The period may be limited or could be co- terminous with disposal of appeal - on consideration of all relevant factors in a given fact situation. In this case, since the stay order dtd . 11.05.2012 does not mention the period, its duration has to be treated as co-terminus with the disposal of appeal. Therefore while the application for early hearing is dismissed, the Department is, directed not to take coercive action for recovery - The miscellaneous application stands disposal of as above. Decision in the case of Poly Fill Sacks vs. Union of India 2005 (2) TMI 148 - HIGH COURT OF GUJARAT followed.

Issues involved:
1. Early hearing of appeal due to Department pressing for recovery despite stay order.
2. Interpretation of Section 35C (2A) regarding disposal of appeals within specified time frames and effect on stay orders.
3. Analysis of legislative intent behind the provision and Tribunal's discretion in granting stays.
4. Requirement for extension of stay orders and considerations for granting extensions.
5. Tribunal's duty to specify the duration of stay orders post the insertion of the Second Proviso.

Detailed Analysis:
1. The judgment addresses an application for early hearing of an appeal due to the Department's insistence on recovery despite an existing stay order. The Tribunal clarifies that the Department cannot initiate coercive action for recovery solely based on the expiration of the stay order after six months, especially if the delay in appeal disposal is not due to the appellant's actions. The Tribunal cites a judgment from the Gujrat High Court to support this stance.

2. The Tribunal delves into the interpretation of Section 35C (2A) of the Act, emphasizing that while appeals should ideally be decided within three years of filing, the provision mandates disposal within 180 days if a stay order is in place. The Tribunal discusses the mandatory language of the provision but ultimately views it as directory in nature, allowing for flexibility based on administrative challenges faced by the Tribunal.

3. Regarding the legislative intent behind the provision, the Tribunal highlights that while the Act aims for timely appeal disposal, it does not intend to restrict the Tribunal's power to grant stays in deserving cases. The judgment emphasizes that the Tribunal retains the authority to grant stays even beyond the initial six-month period without requiring the appellant to seek extensions unless there are changes in circumstances.

4. The Tribunal dismisses the Revenue's argument that appellants must seek extensions of stay orders themselves, particularly for orders predating a specific legislative amendment. The judgment reasons that inundating the Tribunal with extension applications without changed circumstances would be counterproductive, especially considering the existing backlog of pending appeals.

5. Lastly, the Tribunal suggests a practice for specifying the duration of stay orders post the legislative amendment to ensure clarity and efficiency in handling appeals. The judgment concludes by directing the Department not to take coercive action for recovery while treating the duration of the existing stay order as co-terminus with the appeal's disposal, thereby denying the early hearing application but providing guidance for future cases.

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