2015 (4) TMI 383 - HC - Central Excise

Waiver of pre deposit - Manufacture of gutkha and pan masala - if one machine was used for packaging of pan masala having two RSP and the appellant have to pay double duty by treating the machine as being two machines. - Held that - Waiver from pre-deposit and unconditional stay on the realisation of the adjudicated liability has been granted by the Tribunal since a prima facie case was found in favour of the assessee. The Tribunal has also observed that the appeal could 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. - the 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 and stay will continue to remain valid for a period of six months - Appeal disposed of.

Summary

Issues:
1. Appeal by Revenue challenging waiver of pre-deposit granted by Tribunal.
2. Interpretation of Section 35C(2A) of the Central Excise Act, 1944 regarding time limits for stay orders.
3. Application of Supreme Court and High Court judgments on the extension of stay orders.

Analysis:

1. The appeal by the Revenue challenges the waiver of pre-deposit granted by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) to the respondents during the pendency of the appeal. The Revenue questions whether the Tribunal erred in granting an unlimited waiver of assessed demand, exceeding the time limits specified in Section 35C(2A) of the Central Excise Act, 1944. The issue revolves around the Tribunal's authority to specify the time limit of stay, not exceeding 180 days in the first instance and 185 days in the second instance, as per the provisos to the Act.

2. The central issue involves the interpretation of Section 35C(2A) of the Central Excise Act, 1944, which mandates the disposal of appeals within specified time frames. The Supreme Court, in a previous case, emphasized that while the Tribunal may extend the stay period, it must do so only on good cause and if satisfied that the delay is not attributable to the assessee. The High Court, in another instance, highlighted that granting an indefinite waiver of pre-deposit defeats the legislative intent behind the provisions inserted by the Finance Acts of 2002 and 2013. The Tribunal's discretion to extend the stay order was subject to limitations to prevent indefinite extensions.

3. In the present case, the Tribunal granted a waiver from pre-deposit and an unconditional stay on the realization of the adjudicated liability to the respondents. The Tribunal justified this decision based on finding a prima facie case in favor of the assessee and attributed the delay in disposal of the appeal to the pendency of older cases rather than any fault of the assessee. The High Court, considering the circumstances, directed the Tribunal to expedite the appeal's disposal within six months and maintained the validity of the waiver and stay for the same period. The judgment focused on balancing the interests of justice with the statutory provisions governing the time limits for stay orders.

Therefore, the High Court upheld the Tribunal's decision to grant the waiver and stay while emphasizing the need for expeditious disposal of the appeal within the specified time frame to align with the statutory requirements and judicial precedents.