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TMI BlogEnd of Stay PetitionsX X X X Extracts X X X X X X X X Extracts X X X X ..... End of Stay Petitions - By: - Smitesh Desai - Central Excise - Dated:- 11-8-2014 - - Finance (No.2) Bill, 2014 has received the assent of the President s on 6 th August 2014. This brings to an end the practice of stay petitions. The present budget has now enforced mandatory deposit of 7.5% and 10%. Accordingly, the upper limit for disposal of appeals at CESTAT is 3 years. Simultaneously, all provisions regarding Stay have been deleted. As per section 35F, an appellant becomes entitled to contest further, at CESTAT, ONLY IF he pays the deposits. The present time-frame of 180 days + 180 days, max 365 days is now deleted. After 3 years, there will be no hardship for the appellant, because the deposit mechanism is not in relation to Stay, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but as eligibility for appeal. Text of the amendments follows hereafter. Amendment of section 35C Clause 96 of the Finance Act, 2014 In the Central Excise Act, in section 35C, in sub-section (2A) , the first, second and third proviso shall be omitted. SECTION 35C Orders of Appellate Tribunal (1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r taking additional evidence, if necessary. (1A) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an appeal, grant time, from time to time, to the parties or any of them and adjourn the hearing of the appeal for reasons to be recorded in writing : Provided that no such adjournment shall be granted more than three times to a party during hearing of the appeal.. (2) The Appellate Tribunal may, at any time within six months from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendments if the mistake is brought to its notice by the Commissioner of Central Excise or the other party to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the other party, shall not be made under this sub-section, unless the Appellate Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of being heard. (2A) The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed: DELETED Provided that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 35B, the Appellate Tribunal shall dispose of the appeal within a period of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hundred and eighty days from the date of such order: DELETED Provided further that if such appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated: DELETED Provided also that where such appeal is not disposed of within the period specified in the first proviso, the Appellate Tribunal may, on an application made in this behalf by a party and on being satisfied that the delay in disposing of the appeal is not attributable to such party, extend the period of stay to such further period, as it thinks fit, not exceeding one hundred and eighty-five days, and in case the appeal is not so disposed of within the total period of three hundre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and sixty-five days from the date of order referred to in the first proviso, the stay order shall, on the expiry of the said period, stand vacated. (3) ..... (4) ......... Clause 98 of the Finance Act, 2014 In the Central Excise Act , for section 35F , the following section shall be substituted, namely: - Deposit of certain percentage of duty demanded or penalty imposed before filing appeal. 35F . The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal , - Author: Commissioner Appeals Stage (i) under sub-section (1) of section 35 , unless the appellant has deposited seven and a half per cent of the duty demanded or penalty imposed or both, in pursuance of a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision or an order passed by an officer of Central Excise lower in rank than the Commissioner of Central Excise; Author: First Appeal to CESTAT (ii) against the decision or order referred to in clause (a) of sub-section (1) of section 35B , unless the appellant has deposited seven and a half per cent of the duty demanded or penalty imposed or both, in pursuance of the decision or order appealed against; Author: Second Appeal to CESTAT (iii) against the decision or order referred to in clause (b) of sub-section (1) of section 35B , unless the appellant has deposited ten per cent of the duty demanded or penalty imposed or both, in pursuance of the decision or order appealed against: Provided that the amount requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to be deposited under this section shall not exceed rupees ten crores: Author: Existing Stay Petitions unaffected Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014 . Explanation..... Therefore, in the future, all OIOs and OIA (from Commissioner Appeals) are expected to carry a standard clause: Pay 7.5%/10% (one of these will be struck off ) of the amount of Duty/Penalty (one or none of these may be struck off) along with other instructions such file appeal within 60/90 days, etc. The appellant will be entitled to refund of the deposit on successful outcome of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal. However, there are OIOs and OIAs passed before 6 th August 2014 and in respect of which appeals have not been filed, yet. These will require specific intervention by the CBEC through a trade circular. - Reply By Rajagopalan Ranganathan as = Sir, The amended Section 35F does not stipulate that if 7.5%/10% of the amount of duty demanded or penalty imposed or both is deposited with the adjudicating authority, then the balance amount of the duty demanded or penalty imposed or both will remain stayed from recovery proceedings. Department will certainly take a stand that it is within its right to recover the balance amount since there is no stay against recovery of the same. Since Commissioner (Appeals) and CESTAT are divested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the power to grant stay only remedy available will be a writ petition under Art. 226 of the Constitution of India before the jurisdictional High Court. therefore High Court's will be flooded with writ petitions especially during the last quarter of the Financial year. To avoid this the following sentence is to be added to Section 35 F - On payment of 7.5%/10% of duty demanded or penalty imposed or both the recovery of the balance amount duty demanded or penalty imposed or both will remain stayed till the appeal is disposed of the authorities concerned Another point is on filing appeal to Commissioner (Appeals) the assessee will deposit 7.5% of the duty demanded or penalty imposed or both. If he has not succeeded before Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner (Appeals) and files second appeal before CESTAT what is amount to be deposited by him, that is whether 10%-7.5%=2.5% or 7.5%+10%=17.5%. These two points are to be clarified by CBEC urgently. Section 35 F can be amended only when finalce bill 2015 is introduce before Parliament. Dated: 12-8-2014 Reply By Smitesh Desai as = I agree: CBEC has to clarify. Failing which there will be commotion in the trade circles on account of divergent practices. Dated: 12-8-2014 Reply By ALOKE GHOSH as = I fully agree with the observations of Mr. Rangarajan and if the same is not incorporated in the statute, the Department is definitely would go for recovery proceedings taking the plea for non incorporation of such stay provision in the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute. Dated: 13-8-2014 Reply By Smitesh Desai as = You may also consider looking at the amendment this way: What was the previous section? Section 35F . Deposit, pending appeal, of duty demanded or penalty levied....... What is the new provision? 35F . The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal , - When the amendment is read in this light I find that, pre-deposit is replaced by a deposit for eligibility for appeal. The new provisions does not speak about paying the amount before appealing. The previous section said......... the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty demanded or the penalty levied: The new section reads as follows: The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal , - (i) under sub-section (1) of section 35 , unless the appellant has deposited seven and a half per cent of the duty............ I am quite comfortable in the belief that the present deposit is an absolute qualifying amount for prefering an appeal; and no further amounts would be demanded. But of course, CBEC advisory would be most welcome. Dated: 13-8-2014 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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