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TMI Blog2015 (8) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... ti Suzuki (India) Ltd. [2014 (2) TMI 1037 - DELHI HIGH COURT] - This court has struck down the provisions of Section 254(2A) on ground of constitutional validity in the case of PEPSI FOODS PVT. LTD [2015 (5) TMI 655 - DELHI HIGH COURT]. - Means thereby, the tribunal has power to grant extension of stay order. Therefore, we are unable to agree with the reasoning of the Division Bench of this Court in Haldiram India Pvt. Ltd. [2015 (7) TMI 720 - DELHI HIGH COURT] observing that the ratio of the aforesaid decision in Maruti Suzuki (India) Ltd. would apply even to Section 35C(2A) of the CE Act. The decision of the Division Bench in Haldiram India Pvt. Ltd. is hereby overruled. - Decided in favour of assessee. - CEAC No. 27/2015 - - - Dated:- 31-7-2015 - Sanjiv Khanna, S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mr Satish Kumar, Sr. Standing Counsel For the Respondent : None JUDGMENT Sanjiv Khanna, J. The question referred to this Full Bench pertains to power of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to grant or extend stay of recovery of demand beyond 365 days from the date when the stay order was initially passed, not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty days from the date of such order: 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. 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 respondent and on being satisfied that the delay in disposing of the appeal is not attributable to such respondent, 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 hundred 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. x x x x 254(2A) In every appeal, the Appellate Tribunal, where it is possible, may hear and decide such appeal within a period of four years from the end of the financial year in which such appeal is filed under sub-section (1) [or sub-section (2)] [or sub-section (2A)] of section 253: Provided that the Appellate Tribunal may, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yond the period of 365 days from the date when stay was first granted if the assessee was not at fault. Taking notice of the amendment and substitution made by inserting the expression even if the delay in disposing of appeal is not attributable to the assessee it has been held as under:- 17. In these circumstances, we have examined whether we can read down the third proviso, by applying principles of equity, justice and fair play and also the principle that the court should interpret a provision in a manner that it does not lead to arbitrary results or make it violative of Article 14 or would render it unconstitutional. However, it is clear to us that the legislative mandate has to be respected and the courts do not legislate but interpret the statute as a legislative edict. The third proviso after amendment, undoubtedly bars and prohibits the tribunal from extending interim stay order beyond 365 days. It stipulates deemed vacation and imposes no fault consequences in strict terms. The language is clear and therefore has to be respected. However, the provision does not bar or prohibit an assessee from approaching the High Court by way of writ petition for continuation, exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod allowed under the first proviso or the period or periods extended or allowed under the second proviso, the order of stay shall stand vacated after the expiry of such period or periods. Referring to the statutory provisions as they existed prior to substitution of third proviso by Finance Act, 2008, in Maruti Suzuki (India) Ltd. (supra), it has been observed:- 7. The effect of the added provisos as they then existed was considered by the Bombay High Court in Narang Overseas P. Ltd.v. ITAT and others (2007) 295 ITR 22 (Bom) and it was held that the provisos and the Section did not exclude or negate the power of the tribunal to grant relief after the period of 180 days. The intent of the Parliament was not to denude the tribunal of its incidental power to continue the interim reliefs and the mischief which the amendment sought to curtail was long delay and disposal of the proceedings where interim relief was obtained by the assessee. The second proviso read in a reasonable manner was to avoid and check this mischief and not an arbitrary mandate to deny an assessee continuation of interim relief beyond 180 days, when he was not at fault. Amendment of 2007 had extended the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by Bombay High Court in Narang Overseas Pvt. Ltd. (supra). However, the said decision was dealing with and interpreting provisos to Section 254 (2A) after amendment by way of Finance Act, 2008 w.e.f. 1st October, 2008. The said amendment has made substantial difference and has to be duly noted as reflecting a different legislative intent consequent to the amendment. At this stage, we would like to take notice of the decision of Punjab and Haryana High court in PML Industries Ltd. vs. Commissioner of Central Excise 2013 (30) STR 113 (P H), relating to provisions of Section 35(2A) of the CE Act. In the said decision after extensively referring to the case law on the subject and applying the doctrine of reading down, the High Court has held that the circular in question, which stipulated that the demand if not stayed by the tribunal within 30 days would be recovered, should be struck down. It was observed:- 52. The assessee having preferred appeal and that Tribunal being satisfied that condition for dispensing with the pre-deposit of duty demanded and penalty levied is made out, is compelled to pay the duty demanded and penalty levied, if the appeal is not decided within 180 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Legislature in view of the said judgment and keeping in view the language of the existing provisions and the reasoning given in the said judgments has specifically introduced and added the words not attributable to the assessee . This amendment/substitution made to the third proviso is significant. The said words are not redundant or inconsequential and in fact have been added in view of the ratio and the reasoning given in the aforesaid two decisions. This clearly underscores and highlights the intention of the Legislature. Thus, it is clear that in Maruti Suzuki (India) Ltd., the Division Bench was of the opinion that as per the earlier provisions before substitution of the third proviso by Finance Act, 2008, Income Tax Appellate Tribunal had power and authority to extend stay of demand beyond 365 days and the provisions as they then existed were to curtail long delays and ensure expeditious disposal of the appellate proceedings, but without curtailment of power to grant stay beyond 365 days. Reliance was placed on the observations of the Supreme Court in Commissioner of Customs and Central Excise Vs. Kumar Cotton Mills Pvt. Ltd. [2005] 180 ELT 434 (SC), the relevant port ..... X X X X Extracts X X X X X X X X Extracts X X X X
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