2014 (8) TMI 20 - HC - Central Excise

Power to tribunal to grant stay beyond period of 365 days - 3rd proviso to Section 35C(2A) of Central Excise Act, 1944 - Held that - as such on expiry of maximum period of 180 days, the assessee - orig. appellant is required to submit application for extension of stay each time after completion of 180 days and the learned Tribunal is required to consider the individual case and pass a speaking order whether the delay in not disposing the appeal is attributable to original appellant - assessee or not and if it is found that the original appellant - assessee in whose favour the stay has been granted is not cooperating in early disposal of appeal and/or the delay in disposing respective appeals is attributable to the original appellant - assessee, the learned Tribunal is not required to extend the stay more particularly considering the provisions of section 35C( 2A) of the Central Excise Act. - Decided partly in favor of revenue.

Summary

Issues:
Challenging extension of stay beyond 365 days, Requirement of speaking order by Appellate Tribunal

Extension of Stay Beyond 365 Days:
The appellant, Revenue, challenged the orders passed by the Tribunal in extending the stay granted during the pendency of appeals beyond 365 days from the date of initial grant. The issue revolved around whether the Tribunal had committed an error in extending the stay beyond the statutory period. The High Court observed that the Tribunal could extend the stay beyond 365 days if the delay in disposing of the appeal was not attributable to the appellant/assessee and if the appellant had cooperated in the early disposal of the appeal. However, the Tribunal could not extend the stay indefinitely and was required to review the situation every 180 days. The Court emphasized that the Tribunal must make all efforts to dispose of appeals promptly, especially when the stay was against the revenue. The Court directed the Tribunal to maintain a separate register for appeals with stay orders and prioritize their disposal.

Requirement of Speaking Order by Appellate Tribunal:
The second issue raised was whether the Appellate Tribunal was required to pass a speaking order while extending the stay. The Court held that the Tribunal must pass a speaking and reasoned order when extending the stay, considering the provisions of the Central Excise Act. The Court remanded all matters to the Tribunal to pass appropriate orders afresh within two months, ensuring that the applications for extension of stay did not become infructuous. The stay order was directed to continue for a further two months, during which the Tribunal could dispose of the appeals finally. The Court emphasized the importance of passing speaking orders to ensure transparency and accountability in the process.

In conclusion, the High Court allowed the appeals partly, remitting the matters back to the Tribunal for fresh orders. The Court reserved liberty for the department to submit appropriate applications before the Tribunal, following the guidelines provided in a previous judgment. The Tribunal was directed to consider each application for extension of stay after every 180 days and pass speaking orders based on the observations made in the Court's decision. The appeals were disposed of with these directions and observations.