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2015 (2) TMI 184 - HC - Central ExciseWaiver of pre deposit - Extension of stay order - Whether the Hon ble CESTAT was right in law in allowing the Miscellaneous Application filed by respondents, overlooking the insertion of third proviso in Section 35C(2A) of the Central Excise Act, 1944 vide Finance Act, 2013 and thereafter by wrongly applying the decision of Hon ble Supreme Court pronounced in the case of Commissioner of Customs Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Ltd., reported in 2005 (1) TMI 114 - SUPREME COURT OF INDIA , vide which the Interim Stay as granted vide Stay Order No.ST/1737-1738 of 2012 dated 09.10.2012 has been ordered to be continued until further orders - Held that - A request was made by learned counsel appearing for the assessees that the Court may issue direction to establish more number of Benches and for establishment of Circuit Benches to visit the States to decide the matters. They have relied upon a judgment in Metlife India Insurance Co. Ltd. Vs. Union of India, 2013 (4) TMI 78 - KARNATAKA HIGH COURT , in which an observation was made that the Union of India has failed to set up large number of Tribunals such as CESTAT and if this is done, then there would be no cause for complaint over the non-consideration of the applications for stay, in appeals, by only one Tribunal, presently functioning at Bengalore. Only two Benches and one single member is looking after stay matters and hearing of the appeals, arising out of eight States, namely Jammu & Kashmir, Rajasthan, Punjab, Uttar Pradesh, Jharkhand, Chhatisgarh, Delhi and Madhya Pradesh. They have also relied upon para 252 of the speech of Minister of Finance in Lok Sabha, dated July 10, 2014, in which it was stated that to expedite the process of disposal of appeals, amendments have been proposed in the Customs and Central Excise Acts with a view to freeing appellate authorities from hearing stay applications and to take up regular appeals for final disposal. Consequently, the Act was amended with effect from 01.10.2014, omitting Section 35C(2A), with a deposit of 7.5% of the demand for first appeal, and 10% for second appeal. Considering the facts and circumstances of the case and the pendency of the appeals in the CESTAT, New Delhi, we dispose of the present writ petitions as well as the Excise Appeals, in accordance with the view taken by the Allahabad High Court in Commissioner, Customs And Central Excise Versus M/s JP. Transformers 2013 (10) TMI 1194 - ALLAHABAD HIGH COURT , with directions to the CESTAT, New Delhi, to decide the appeals as expeditiously as possible, and preferably within a period of six months from today. The waiver of pre-deposit. to the extent directed by CESTAT, will be valid until the final disposal of the appeal. This order has been passed with an understanding that the assessees will not seek any unavoidable adjournment. - Appeal disposed of.
Issues:
1. Extension of stay order by CESTAT beyond 365 days. 2. Interpretation of Section 35C of the Central Excise Act, 1944. 3. Impact of recent amendments on the disposal of appeals. 4. Pendency of appeals and the need for expedited decision-making. 5. Establishment of more benches for efficient handling of cases. Extension of Stay Order by CESTAT Beyond 365 Days: The High Court addressed the issue of extending stay orders beyond 365 days in cases like M/s Rathi TMT Saria Pvt. Ltd. Vs. Union of India & Ors. and Commissioner of Central Excise Vs. M/s KEC International Ltd. The Court considered whether the CESTAT was justified in extending the stay orders, ignoring the time limit set by Section 35C(2A) of the Central Excise Act, 1944. The Court analyzed the reasoning behind the extension of stay orders and the implications of such actions on the statutory provisions. Interpretation of Section 35C of the Central Excise Act, 1944: The Court delved into the interpretation of Section 35C of the Act, citing the Supreme Court's decision in Commissioner of Cus. & C.Ex., Ahmedabad Vs. Kumar Cotton Mills Pvt. Ltd. The judgment highlighted the need for justifiable reasons to extend the period of stay, emphasizing that such extensions should only be granted in exceptional circumstances beyond the control of the assessee. The Court examined the provisions added by the Finance Act, 2013, including the third proviso, to regulate the extension of stay orders and the consequences of non-compliance. Impact of Recent Amendments on the Disposal of Appeals: The Court acknowledged the impact of recent amendments, particularly the omission of Section 35C(2A) by the Finance Act, 2014, effective from October 1, 2014. The amendments allowed for appeals to be filed with a deposit of a specified percentage of the demand, streamlining the appellate process and reducing the reliance on stay orders beyond the stipulated time limit. Pendency of Appeals and the Need for Expedited Decision-Making: Considering the substantial backlog of cases in CESTAT, New Delhi, the Court recognized the necessity for expeditious disposal of appeals. The Court referred to judgments from other High Courts, such as the Allahabad High Court, which directed timely disposal of appeals and emphasized the importance of efficient case management to prevent undue delays that could impact both the assessee and the Revenue. Establishment of More Benches for Efficient Handling of Cases: In response to the plea for establishing additional benches to address the overwhelming number of pending appeals, the Court declined to issue specific directions, leaving the matter for the Central Government's consideration. The Court noted the challenges posed by the limited number of benches handling a vast number of cases and highlighted the need for a strategic approach to enhance the efficiency of the appellate process, as evidenced by proposed amendments aimed at expediting appeal disposal. Conclusion: The High Court disposed of the writ petitions and excise appeals, aligning with the directive of the Allahabad High Court for expeditious appeal resolution within six months. The Court emphasized the importance of prioritizing high-value appeals while ensuring a fair balance between the interests of the assessee and the Revenue. The order underscored the expectation that assessees would cooperate by avoiding unnecessary adjournments, promoting a swift and effective resolution of pending appeals in CESTAT, New Delhi. This detailed analysis of the judgment provides a comprehensive understanding of the issues addressed by the High Court regarding the extension of stay orders, statutory interpretation, recent amendments, case pendency, and the call for enhanced efficiency in handling appeals.
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