2013 (10) TMI 811 - AT - Service Tax

Extension of operation of the orders - Section 35F and 35C - Held that - there is no specific provision authorising grant of stay of realisation of the adjudicated liability. However the power to grant of stay pending the hearing of an appeal being an inherent power of an appellate forum/quasi judicial forum, such power is exercised as integral to the appellate jurisdiction. It is this exercise of the power to grant of stay that is the subject matter of the sunset clause in the proviso to Sub Section (2A) of Section 35C. The sunset clause does not apply to grant of waiver of pre-deposit, an exercise conditioned by the provisions of Section 35F - orders of the Tribunal in the stay application in the two appeals, notwithstanding the observations that the grant of waiver shall operate during the pendency of the appeal - stay to continue till disposal of appeal.

Issues:
1. Extension of operation of orders dated 20.9.2013.
2. Applicability of provisions of Central Excise Act 1944.
3. Interpretation of Section 35F regarding pre-deposit.
4. Jurisdiction of the Tribunal after pre-deposit determination.
5. Provisions of Section 35C regarding appeal disposal timelines.
6. Power to grant stay of realisation of adjudicated liability.
7. Sunset clause in Section 35C(2A) regarding stay orders.

Extension of operation of orders dated 20.9.2013:
The Tribunal clarified that the orders dated 20.9.2013 granting waiver of pre-deposit for the balance adjudicated liability during the appeal's pendency or for six months, whichever is earlier, did not involve a stay of realisation of the adjudicated liability. The applications seeking extension of these orders were dismissed as they were based on the incorrect assumption of a stay being granted.

Applicability of provisions of Central Excise Act 1944:
The judgment highlighted that the provisions of the Central Excise Act 1944 are applicable in determining pre-deposit of adjudicated liability and handling appeals under Section 83 of the 1994 Act. Sections 35C and 35F of the 1944 Act are specifically relevant to proceedings under the Finance Act, 1994.

Interpretation of Section 35F regarding pre-deposit:
Section 35F mandates the deposit of duty demanded or penalty levied pending an appeal, with a provision for waiver if deemed to cause undue hardship. The Tribunal's discretion to grant waiver of pre-deposit activates its jurisdiction to proceed with adjudicating the dispute, with no time limitation or sunset clause hindering the appeal process post pre-deposit determination.

Jurisdiction of the Tribunal after pre-deposit determination:
The judgment clarified that the Tribunal's obligation to hear an appeal is not time-bound after the pre-deposit stage, as Section 35F does not impose a sunset clause limiting the Tribunal's right to adjudicate post pre-deposit determination.

Provisions of Section 35C regarding appeal disposal timelines:
Section 35C outlines the timeline for appeal disposal, with provisions for hearing and deciding appeals within three years of filing. Specific timelines are set for disposing of appeals where stay orders are involved, with provisions for extension under certain circumstances.

Power to grant stay of realisation of adjudicated liability:
While there is no explicit provision for granting stay of realisation of adjudicated liability, the Tribunal possesses inherent power to grant stay pending appeal, integral to its appellate jurisdiction. The sunset clause in Section 35C(2A) applies to the grant of stay orders but not to the exercise of granting waiver of pre-deposit under Section 35F.

In conclusion, the judgment provided a detailed analysis of the issues concerning the extension of orders, applicability of relevant legal provisions, interpretation of pre-deposit requirements, Tribunal's jurisdiction post pre-deposit, appeal disposal timelines, and the power to grant stay of realisation of adjudicated liability, ensuring clarity on the Tribunal's authority and the procedural aspects involved in the appeals process.

← Previous Next →