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TMI Blog2014 (1) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 35F of the Act which only dispenses with the requirement of pre-deposit of duty and penalty for entertaining the appeal on merits. The dispensing with the requirement of predeposit of duty and penalty under the proviso to Section 35F of the Act for the purposes of hearing the appeal could at the highest be said to restrain the revenue from taking any coercive action for recovery but would not estop the revenue from adjusting amounts which become subsequently due to the petitioner towards the amount payable by the petitioner to the department. Besides, introduction of the third proviso to sub-section (2A) of Section 35C of the Act introduced in 2013 would appear to dilute the applicability of the decision relied upon by the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005 was issued; (ii) By order dated 31 July 2006 the Commissioner of Central Excise, Raigad, confirmed a duty demand of Rs.53,53,452/- along with interest thereon and equivalent amount of penalty. Besides, imposing a penalty of Rs.5,00,000/- and Rs.2,00,000/- on the two Directors of the petitioner respectively; (iii) Being aggrieved by the above order dated 31 July 2006, the petitioner and its Directors preferred appeals to the Customs Excise and Service Tax Tribunal (Tribunal). The petitioner and its two Directors also filed applications for dispensing with the predeposit duty, interest and penalty before the Tribunal for the purposes of hearing its appeals on merits; (iv) By order dated 15 December 2006, the Tribunal disposed of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same be appropriated against confirmed dues recoverable in pursuance of the order in original dated 31 July 2006 passed by the Commissioner of Central Excise, Raigad. (viii) Thereafter by impugned notice dated 27 November 2013, the Superintendent of Central Excise, called upon the petitioner and its two Directors to forthwith pay the balance amount of duty and also penalty remaining unpaid after appropriation of the rebate; (ix) The petitioner-company has therefore moved this Court challenging the above three orders, one dated 11 November 2013 and two dated 21 November 2013 passed by the Assistant Commissioner of Central Excise for adjusting the petitioner's duty liability and the penalty against the rebate sanctioned by revenue and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petitioner's rebate aggregating to Rs.87,05,330/- against the dues payable under the impugned order of the Commissioner dated 31 July 2006 can arise. 4. As against the above, Mr. Jetly, learned Counsel appearing for the respondent-revenue invites our attention to newly added third proviso to Sub-Section 2A of Section 35C of the said Act w.e.f. 2013. The newly added proviso specifically provides that the stay granted by the Tribunal would come to an end at the conclusion of 365 days from its grant. This statutory amendment it was submitted, was introduced to get over the decision of the various Courts which provides that the extension of the stay is deemed to be granted by the Tribunal in case the application for extension of stay is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court was dealing with a Circular issued by Central Board of Excise and Customs dated 1 January 2013 directing recovery proceeding even in situation where the stay applications are pending before the appellate authorities. So far as the Apex Court's decision in Kumar Cotton Mills Ltd. (supra) is concerned, it was dealing with the effect of stay order passed prior to introduction of subsection 2A to Section 35C of the Act. In the above context, it was held that the above amendment did not curtail the power of the Tribunal to extend the stay exceeding six months. 6. In the present case, the revenue is not seeking to initiate recovery proceeding on the expiry of a stay. In this case, the revenue is seeking to exercise its power under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the ITAT that even after the introduction of the above third proviso, the ITAT can extend the stay. 7. In view of the above and in the facts of the case, interests of justice will be met by disposing of this Writ Petition in terms of the following directions:- (a) The respondent shall adjust the rebate amount only to the extent that the duty amount of Rs.53,53,452/- is payable by the petitioner to the revenue in terms of order dated 31 July 2006. (b) The respondent shall not adjust the rebate amount to satisfy the penalties due from the petitioner-company and its directors in the pending appeals before the Tribunal. (c) After adjustment of the duty amount from rebate sanctioned, the balance amount would be released in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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