2014 (10) TMI 514 - HC - Central Excise

Waiver of pre deposit - Whether the Hon ble CESTAT erred in granting waiver of pre-deposit of assessed demand in favour of the respondents during pendency of the appeal thereby extending the period of stay beyond 365 days ignoring the recent amendment to section 35-C of the Central Excise Act, 1944, made through enactment of Finance Bill, 2013 - Held that - Tribunal has noted that a waiver of pre-deposit and unconditional stay on the realisation of the adjudicated liability was granted by the Tribunal since a prima facie case was found in favour of the assessee. The Tribunal has also observed that the appeal has not been disposed of only on account of the pendency of several older appeals and not on account of any delay on the part of the assessee. ends of justice would be met if the Tribunal is requested to dispose of the appeal expeditiously and preferably within a period of six months from today. The waiver of pre-deposit will continue to remain valid for a period of six months from date of this order - Decided partly in favour of Revenue.

Summary

Issues:
1. Extension of stay beyond 365 days granted by the CESTAT.
2. Interpretation of Section 35C (2A) of the Central Excise Act, 1944 regarding waiver of pre-deposit.

Extension of Stay Beyond 365 Days:
The appeal by the Revenue was against an order of the Customs, Excise & Service Tax Appellate Tribunal granting extension of stay beyond 365 days from the date of the original grant. The Tribunal had granted waiver of pre-deposit and unconditional stay of the adjudicated liability, which was the subject matter of the substantive appeal. The Revenue contended that the Tribunal erred in extending the stay period beyond 365 days, ignoring the recent amendment to Section 35-C of the Central Excise Act, 1944. The Tribunal noted that the appeal's delay was due to the pendency of older appeals and not due to any fault of the appellant.

Interpretation of Section 35C (2A) - Waiver of Pre-deposit:
The main legal issue revolved around the interpretation of Section 35C (2A) of the Central Excise Act, 1944, specifically regarding the waiver of pre-deposit. The Division Bench referred to a previous case where the Supreme Court emphasized that the waiver of pre-deposit cannot be granted indefinitely. The purpose of the provision was to ensure expeditious disposal of appeals. The Court held that the Tribunal should decide appeals expeditiously and preferably within a specified timeframe to prevent the defeat of the provision's objective. The waiver of pre-deposit was allowed to continue for a specific period to balance the interests of the parties.

Conclusion:
The High Court disposed of the appeal by directing the Tribunal to decide the appeal expeditiously, preferably within six months. The waiver of pre-deposit was allowed to remain valid for the same period. The Court relied on previous judgments to answer the legal questions raised by the Revenue. The decision highlighted the importance of timely disposal of appeals and the limitations on granting waivers of pre-deposit indefinitely. No costs were awarded in the matter.