2014 (10) TMI 599 - HC - Central Excise

Power of tribunal to grant stay beyond the total period of 365 days - extension of stay granted earlier - extension order should be speaking or not - Held that -in case and having satisfied that delay in not disposing of the appeal within 365 days (total) from the date of grant of initial stay is not attributable to the appellant / assessee in whose favour stay has been granted and that the Appellate Tribunal is satisfied that such appellant / assessee has fully cooperated in early disposal of the appeal and/or has not indulged into any delay tactics and/or has not taken any undue advantage, the learned Appellate Tribunal may, by passing a speaking order as observed hereinabove, extend stay even beyond the total period of 365 days from the date of grant of initial stay. However, as observed by the Hon ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (2005 (1) TMI 114 - SUPREME COURT OF INDIA), it should not be construed that any latitude is given to the Appellate Tribunal to extend the period of stay except on good cause and if the Appellate Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Appellate Tribunal for the reasons not attributable to the assessee. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. On expiry of every 180 days the concerned assessee / appellant is required to submit an appropriate application before the learned Appellate Tribunal to extend the stay granted earlier and the Appellate Tribunal may extend the stay for a further period but not beyond 180 days at a stretch and on arriving at the subjective satisfaction, as stated hereinabove, the Appellate Tribunal may extend the stay even beyond 365 days from the date of grant of initial stay and even thereafter. - Thus, on expiry of maximum period of 180 days the assessee / appellant is required to submit application for extension of stay each time and the Appellate Tribunal is required to consider the individual case and pass a speaking order, as stated hereinabove. - Matter remanded back - Following decision of Commissioner Versus Small Industries Development Bank of India 2014 (7) TMI 738 - GUJARAT HIGH COURT - Decided partly in favor of revenue.

Summary

Issues involved:
1. Extension of stay beyond 365 days by Customs, Excise and Service Tax Appellate Tribunal.
2. Jurisdiction of the Customs, Excise and Service Tax Appellate Tribunal to extend stay beyond 365 days.
3. Granting extension of stay in an appeal pending for more than 4 years.
4. Error in passing a common non-speaking order for extension of stay.

Analysis:
1. The appellant challenged the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) for extending the stay beyond 365 days. The High Court referred to a previous decision and held that the Tribunal can extend the stay beyond 365 days if the delay is not due to the appellant, and the Tribunal is satisfied with the cooperation of the appellant. The Tribunal must review the situation every 180 days and consider each extension individually. The Court emphasized the need for early disposal of appeals and directed the Tribunal to prioritize cases with stay orders.

2. The High Court addressed the issue of whether the Tribunal is required to pass a speaking order when extending stay. It ruled in favor of the revenue department, stating that the Tribunal must pass a speaking and reasoned order while extending stay. The Court remanded all matters to the Tribunal to pass appropriate orders within two months, ensuring that the stay orders remain in effect during this period. The Tribunal was directed to dispose of the appeals promptly.

3. Regarding the extension of stay in an appeal pending for more than 4 years, the Court reiterated the principles established in a previous judgment. It held in favor of the appellant, emphasizing the importance of the Tribunal's discretion in granting extensions based on individual circumstances. The Court directed the Tribunal to pass a fresh speaking order on the application for extending the stay within two months.

4. The Court also addressed the issue of passing a common non-speaking order for extension of stay. It ruled in favor of the revenue department, stating that each matter should be considered independently regarding delay and reasons for delay. The Court directed the Tribunal to pass fresh orders on each case individually, ensuring a speaking and reasoned order for each extension of stay.

In conclusion, the High Court partially allowed the appeal, holding in favor of the appellant on certain issues and in favor of the revenue department on others. The matters were remitted back to the Tribunal for fresh orders within a specified timeframe, emphasizing the need for prompt disposal of appeals and proper documentation of reasons for extending stays.