2014 (6) TMI 415 - AT - Central Excise

Extension of stay granted - Cross appeal by revenue for vacation of stay order - Section 35C(2A) - Held that - Hon ble Supreme Court in the context of insertion of sub-section (2A) of Section 35C of the Act provided that if such appeal is not disposed of within the period specified in the first proviso, the stay order shall on the expiry of that period, stand vacated, observed that sub-section which was introduced in terrorem cannot be construed as punishing the assessees for matters which may be completely beyond their control. In the present case, appeal was not disposed of within the stipulated period as specified in Section 35C and therefore vacating the stay order amounts to punishing the assessee. We find that the decision of the Hon ble Supreme Court was not placed before the Tribunal while passing the Misc. Order dated 5-6-2012 and therefore the said order is not applicable in the present case - Extension of stay granted.

Summary

Issues:
Extension of stay order beyond 180 days from the date of stay order.

Analysis:
The case involved an application for the extension of a stay order beyond the 180 days from the date of the original stay order. The Assessee sought the extension based on the Hon'ble Supreme Court decision in the case of Commissioner of Customs & C. Ex., Ahmedabad v. Kumar Cotton Mills Pvt. Ltd. The Revenue, on the other hand, argued against the extension, citing an amendment in Section 35C(2A) of the Finance Act, 2013, which they believed eliminated the need for extending the stay order.

After considering both arguments, the Tribunal referred to the Hon'ble Supreme Court's observations in the case of Kumar Cotton Mills Pvt. Ltd. regarding the provisions of Section 35C(2A) of the Central Excise Act, 1944. The Supreme Court emphasized that the sub-section introduced should not be seen as punishing the assessee for matters beyond their control. The Tribunal noted that the Finance Act 2013 included a proviso allowing the Appellate Tribunal to extend the period of stay if the delay in disposing of the appeal was not attributable to the party. The Tribunal found that the appeal was not disposed of within the specified period, leading to the stay order being vacated, which would unfairly penalize the assessee.

The Tribunal highlighted that the decision of the Hon'ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd. was not considered when the Revenue's application was rejected in a previous order. Therefore, the Tribunal allowed the extension of the stay order until the disposal of the appeal, following the judgment of the Hon'ble Supreme Court in the case of CCE, Ahmedabad v. Kumar Cotton Mills Pvt. Ltd. The Tribunal rejected the Revenue's application and granted the extension of the stay order in favor of the Assessee.

In conclusion, the Tribunal's decision was based on the interpretation of relevant legal provisions and the application of the Hon'ble Supreme Court's judgment to ensure fairness and justice in the matter of extending the stay order beyond the stipulated period.