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TMI Blog2014 (12) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... RAL EXCISE, JAIPUR [2014 (9) TMI 698 - CESTAT NEW DELHI] - Decided in favour of assessee. - Misc. Order No. CESTAT/BNG/M.O./1/2014 - - - Dated:- 29-5-2014 - Shri B.S.V. Murthy, Member (T) and S.K. Mohanty, Member (J) Shri Jitender Motwani, G. Shivadass, V. Raghuraman, Advocates and Rajeshkumar, C.A., on behalf of Bar Association. Dr. A.K. Nigam S/Shri R. Gurunathan, Addl. Commissioners, S. Teli, Deputy Commissioner and N. Jagdish, Superintendent (ARs), on behalf of Revenue. ORDER This Tribunal had been considering applications for extension of stay in cases where requirement of pre-deposit of the full amount or part amount is waived and stay has been granted and after considering whether the appellant had contributed to the delay in deciding the appeal, granting such extension. After the Hon ble High Court of Allahabad rendered its decision in the case of CC CE v. J.P. Transformers [2013-TIOL-1152-ALL-ST = 2014 (307) E.L.T. 436 (All.)], the representatives for the Department contended that according to the decision of the Hon ble High Court, extension of stay cannot be granted in view of the second proviso to Section 35C(2A) brought in by way of amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es is that even the legislature accepted the fact that the power to grant stay is an inherent power. In this connection, the decision of the Hon ble Supreme Court in the case of Kumar Cotton Mills [2005 (180) E.L.T. 434 (S.C.)] is to be taken note of where Hon ble Supreme Court also made an observation that power to grant stay is an inherent power of the Tribunal. 5. In view of the specific provision in the law that the stay granted against recovery shall stand vacated if the appeal is not decided within 180 days and whether the Tribunal in such cases can extend the stay beyond the period of 180 days was considered by the apex court in the case of Kumar Cotton Mills (supra). The Apex Court upheld the decision of the Larger Bench of the Tribunal in the case of IPCL v. CCE, Vadodara [2004 (169) E.L.T. 267 (Tri.-LB)] wherein the Tribunal had taken the view that the Tribunal had power to extend the stay beyond 180 days and made the following observations :- 4. In Themis Pharmaceuticals reliance placed by the appellant on Kumar Cotton Mills Pvt. Ltd. was brushed aside by the Bench observing that it was a decision given in a vacuum in the absence of a dispute and therefore not bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slative Assembly concerned. Article 164(4) is not a source of power or an enabling provision for appointment of a non-legislator as a Minister even for a short duration. It is actually in the nature of a disqualification or restriction for a non-member who has been appointed as a Minister to continue in office without getting himself elected within a period of six consecutive months. Reappointing that individual without his getting elected would, therefore, be undemocratic and derogatory to the Constitutional scheme, an abuse of Constitutional provisions and the Constitutional scheme. The intention of the framers of the Constitution to restrict such appointment for a short period of six consecutive months, cannot be permitted to be frustrated through manipulation of reappointment. We fail to comprehend how the ratio of the above decision rendered in the context of Constitutional provisions would apply to the facts of the present case. 6. The observation of the Bench that if the Tribunal grants further extension of stay beyond the period of 180 days the amendment would become redundant is also not justified. A similar contention raised in regard to sub-section (2A) of Section 254 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee could not be penalised for vacating the stay order. We find justification in the prayer made by the department that the Tribunal should not have extended the order by which it had waived the pre-deposit of the assessed demand indefinitely. Such an order is likely to be misused by the assessee. Though we are conscious of the pendency of the appeals and workload assigned to the Principal Bench as well as various Benches of CESTAT, we are of the view that entire object and purpose of insertion of sub-section 2A in Section 35C by Section 140 of the Finance Act, 2002 (20 of 2002) w.e.f. 11-5-2002 and third Proviso by Finance Act, 2013 will stand defeated, if the waiver of pre-deposit is granted indefinitely (Emphasis added). The judgment in Kumar Cotton Mills Pvt. Ltd. (supra) cannot be interpreted to give powers to the Tribunal to extend the order of waiver of pre-deposit indefinitely. In the circumstances, the appeal is disposed of with directions to the CESTAT to decide the appeal expeditiously and if possible within a period of six months from the date of the extension dated 3-6-2013. The waiver of pre-deposit will continue to be valid up to the period of six months from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esh Jaiswal (supra), the waiver of pre-deposit and stay of proceedings for realization of balance liability was ordered to continue for a period of 6 months or till the disposal of the appeal, whichever is earlier. This would show that the Tribunal had clearly followed the decision of the Hon ble High Court of Allahabad and also granted extension only for a limited period and not indefinitely. 12. Learned AR also submitted that the observations of the Tribunal in para 11 in respect of Article 226(3) of the Constitution cannot be applied and these are relevant only in respect of High Courts. We would not like to discuss this submission in detail in view of the fact that this is only an observation made during the course of passing the order and cannot be considered as a ratio decidendi. 13. The learned AR also submitted that if extension needs to be granted beyond the period of 365 days by the Tribunal it would defeat the very purpose of introduction of this provision in the law. In the normal course, this submission would have to be accepted and upheld. However, our observations about the provisions of Section 35C over the years and the decision of the Hon ble Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led prior to June 2013, the amended Section 35C of the Act and the second proviso introduced would not be applicable. Further during the course of hearing, we also found that in the case of Jothi Calendering Mills v. CCE, Salem [2014 (300) E.L.T. 115 (Tri.-Chennai)], this Tribunal had taken a similar view and held that extension can be granted. However this decision did not take note of the decision of the Hon ble High Court of Allahabad. 16. Reliance was also placed on the decision in the case of CCE, Mangalore v. IOCL [2010 (258) E.L.T. 504 (Kar.) = 2010 (20) S.T.R. 458 (Kar.)]. Paragraphs 12 13 are relevant and are reproduced below:- 12. Therefore, it is clear that the sub-section though was introduced in terrorem cannot be construed as punishing the assessee for matters; which may be completely beyond their control. The sole object behind this amendment is to ensure speedy disposal of the appeals where orders of stay was granted and duty payable to the revenue are withheld. The said provisions act in terrorem preventing the assessee from delaying the disposal of the appeal. But if the assessee is not at fault and the Tribunal for reasons beyond its control is unable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not expressly barred by the Statute, there can be no restrictions on such power. 17. The decision of Hon ble High Court of Pubjab Haryana in the case of PML Industries Ltd. v. CCE Another [2013-TIOL-201-HC-P H-CX = 2013 (290) E.L.T. 3 (P H) = 2013 (30) S.T.R. 113 (P H)] was also cited. In this case, Hon ble High Court took the view that in terms of judgments in Anant Mills Ltd. and Seth Nadlal cases, such condition of automatic vacation of stay on the expiry of 180 days, has to be read down to mean that after 180 days the Revenue has a right to bring to the notice of the Tribunal the conduct of the assessee in delay or avoiding the decision of appeal, so as to warrant an order of vacation of stay. Hon ble High Court has also observed that second proviso has also read down to mean that after 180 days, Revenue has right to seek vacation of stay on proof of the fact that assessee is the one who has defaulted or taken steps to delay the ultimate decision. In our opinion, these decisions also support the claim of the appellants that application for extension of stay has to be considered and Tribunal can consider the same and grant extension. 18. Another decision which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above discussions, even though the decision of the Bench in the Misc. Order dated 3-2-2014 was only referred to in one appeal, we consider that it would be appropriate for us to lay down guidelines which we intend to follow in future for consideration of the stay extension applications and further we also make it clear that we intent to follow the observations of the Tribunal in Misc. Order dated 3-2-2014. Accordingly in future the stay and waiver granted in the first instance will be followed for 180 days and second extension and thereafter extensions will be granted for a limited period in accordance with law as and when applications are filed after ensuring that delay in decision on the appeal is not caused by the appellant. 21. At the request of both the sides, we also consider it appropriate to lay down certain other guidelines with regard to applications for extension of stay as follows :- (a) The appellants should ensure that they file application for extension of stay within the period prescribed under the law without fail. While filing the application for extension of stay, a copy should be submitted to the officers who enforce the adjudication orders ..... X X X X Extracts X X X X X X X X Extracts X X X X
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