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2014 (7) TMI 201 - AT - Service TaxExtension of stay granted - Waiver of pre deposit already granted - Held that - A provisions of Section 35C(2A) enact a sunset period for operation of an order of stay granted and not for the vitality of an order of waiver of pre deposit. Pre deposit is a condition precedent for entertaining an appeal. This requirement is enjoined by Section 35F of the Central Excise Act, 1944. Pre deposit once order (or waived) will operate for the duration of the appeal and is not subject to sunset period. An order granting stay is however, as earlier noticed, is in exercise of inherent power of the Tribunal, not in exercise of a legislated grant of power. It is the stay granted in exercise of such inherent power that is subject to the sunset clause enacted in Section 35C(2A) of the 1944 Act. Even where no stay is granted by the Tribunal and mere waiver of pre deposit is ordered under Section 35F, such order of waiver of pre deposit would operate as stay all further proceedings for recovery of the adjudicated liability; since parameters for grant of stay and for waiver of pre deposit are in pari materia. Order dated 9.12.2011, granting waiver of pre deposit of penalty (on noticing that the assessed tax demand had been remitted), is a grant of waiver that would operate during pendency of this appeal and the order of waiver is not subject to the provisions of Section 35C(2A) of the 1944 Act. Since waiver of pre deposit was alone granted on 21.12.2011, the Respondent shall taken an appropriate decision in conformity with the law declared by the Kerala High Court in Ashoka Rubber Products 1989 (7) TMI 103 - HIGH COURT OF KERALA AT ERNAKULAM - Decided in favour of Revenue.
Issues:
1. Extension of stay granted by the Tribunal. 2. Interpretation of provisions of Section 35C(2A) of the Central Excise Act, 1944. 3. Sunset period for operation of an order of stay. 4. Applicability of waiver of pre-deposit as a stay on recovery proceedings. 5. Judicial review for aggrieved parties. Extension of Stay Granted by the Tribunal: The appellant sought an extension of the stay granted on 21.12.2011, which had been further extended. The Tribunal clarified that the waiver of pre-deposit granted on 21.12.2011 operated as a stay of proceedings for recovery, and Revenue was not to initiate recovery steps. The present application sought a further extension due to a letter from the Superintendent of Central Excise informing the appellant of the vacation of the stay order. Interpretation of Provisions of Section 35C(2A) of the Central Excise Act, 1944: Section 35C(2A) mandates the disposal of appeals within specific timeframes. The first proviso requires disposal within 180 days of a stay order, with the second proviso stating that if not disposed within the specified period, the stay order stands vacated. The third proviso allows for an extension of the stay period under certain conditions. Sunset Period for Operation of an Order of Stay: The Tribunal noted an overload of miscellaneous applications for stay extensions due to the expiration of the 180 or 365-day period from the initial stay order. The Tribunal highlighted the need for expeditious handling of such cases, considering the substantial pendency of appeals. Applicability of Waiver of Pre-Deposit as a Stay on Recovery Proceedings: The Tribunal discussed the statutory discretion under Section 35F to grant waiver of pre-deposit as a condition for hearing an appeal. While there is no specific power to grant stay, the Tribunal exercises inherent power to pass interim orders. The judgment clarified that a waiver of pre-deposit operates as a stay on recovery proceedings during the appeal's pendency. Judicial Review for Aggrieved Parties: The Tribunal emphasized that the order of waiver of pre-deposit granted on 21.12.2011 would operate during the appeal's pendency and was not subject to the provisions of Section 35C(2A). The appellant was advised to seek appropriate reliefs, including judicial review, if aggrieved by further proceedings initiated by Revenue. This detailed analysis of the judgment provides insights into the extension of stay, statutory provisions, sunset period for stay orders, the interplay between waiver of pre-deposit and stay on recovery proceedings, and the recourse available to parties through judicial review.
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