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CESTAT has the powers to extend the stay beyond the period of 365 days under the provisions of Section 35C (2A) of the Central Excise Act, 1944

2014-TIOL-1846-CESTAT-AHM

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH, AHMEDABAD

Application No.E/MA(Extn)10941/2014
Appeal No.E/509/2011

Arising out of Order-in-Original No.02-03-COMMR-2011 Dated: 11.1.2011
Passed by the Commissioner of Central Excise & ST., Ahmedabad

Date of Hearing: 31.7.2014
Date of Decision: 2.9.2014

M/s BHARAT VIJAY MILLS

VS

COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, AHMEDABAD

Appellant Rep by: Shri Anand Mishra, Adv.
Respondent Rep by:
 Shri J Nagori, AR

CORAM: M V Ravindran, Member (J)
H K Thakur, Member (T)

CE - Tribunal granting extension of stay to the appellant - Revenue appealing to Gujarat High Court & High Court holding that CESTAT has the powers to extend the stay beyond the period of 365 days under the provisions of Section 35C (2A) of the Central Excise Act, 1944 - on the point that the Tribunal has to pass a reasoned order matter was remanded by High Court.

Held: High Court has held that extension can be allowed after looking to the facts of the case - Bench observing from the case records that the stay was granted to the appellant on 16.04.2012 and afte r granting of stay appeal was never listed by Registry for final hearing due to heavy work load - since there is no fault of the appellant in seeking extension of the stay already granted, the request made by appellant is genuine and extension of stay is granted for a further period of 180 days: CESTAT [ para 3, 6]

Application allowed

Case law cited:

Commissioner of Customs & Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Ltd - 2005-TIOL-42-SC-CESTAT …referred

ORDER NO.M/13999/2014

Per: Mr H K Thakur:

This extension application was filed by the appellant requesting for extension of stay granted by this Bench. The extension requested by the appellant was earlier granted by this Bench against which Revenue went in appeal to Hon'ble Gujarat High Court. The Hon'ble High Court vide a common order dated 09.07,2014, in the appeals filed by Revenue framed . the following questions:-

(i) Whether the learned Appellate Tribunal has jurisdiction to extend the stay granted earlier beyond the total period of 365 days in view of statutory provisions contained in Section 35C(2A) of the Central Excise Act, 1944?

(ii) Whether even if it is held that the learned Appellate Tribunal can extend the stay granted earlier beyond the total period of 365 days, the learned Appellate Tribunal is required to pass a speaking order / reasoned order considering 3rd proviso to section 35C(2A) of the Central Excise Act, 1944?

2. So far as question (i) above is concerned, the Hon'ble High Court, relying upon the decision of the Hon'ble Supreme Court in the case of Commissioner of Customs & Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Limited - [2005 (180) ELT 434 (SC)] = 2005-TIOL-42-SC-CESTAT, held that CESTAT has the powers to extend the stay beyond the period of 365 days under the provisions of Section 35C (2A) of the Central Excise Act, 1944,

3. So far as question (ii) above is concerned, the Hon'ble High Court made following observations before remanding the extension applications back to this Bench for deciding the same within a period of two months from the date of the order:-

"5.8. Now, so far as second question which is posed for consideration of this Court is whether while disposing of the application for extension of stay granted earlier, the learned Appellate Tribunal is required to pass a speaking / reasoned order or not? As observed hereinabove, the learned Appellate Tribunal can extend the stay granted earlier beyond the period of 365 days from the date of grant of initial stay, however, on being subjectively satisfied by the learned Appellate Tribunal and on an application made by the assessee / appellant to extend stay and on being satisfied that the delay in disposing of the appeal within a period of 365 days from the date of grant of initial stay, is not attributable to the appellant / assessee and that the assessee is not at fault and therefore, while considering each application for extension of stay, the learned Appellate Tribunal is required to consider the facts of each case and arrive at subjective satisfaction in each case whether the delay in not disposing of the appeal within the period of 365 days from the date of initial grant of stay is attributable to the appellant - assessee or not and/or whether the assessee / appellant in whose favour stay has been granted, has cooperated in early disposal of the appeal or not and/or whether there is any delay tactics by such appellant / assessee in whose favour stay has been granted and/or whether such appellant is trying to get any undue advantage of stay in his favour or not. Therefore, while passing such order of extension of stay, learned Appellate Tribunal is required to pass a speaking order on each application and after giving an opportunity to the representative of the revenue - Department and record its satisfaction as stated hereinabove. Therefore, ultimately if the revenue - department is aggrieved by such extension in a particular case having of the view that in a particular case the assessee has not cooperated and/or has tried to take undue advantage of stay and despite the same the learned Appellate Tribunal has extended stay order, revenue can challenge the same before the higher forum / High Court.

5.9. All these appeals, on considering the impugned orders passed by the learned Appellate Tribunal extending stay, it appears that the impugned orders are non-speaking and non-reasoned orders and therefore, as such matters are required to be remanded to the learned Appellate Tribunal to consider the respective applications for extension of stay afresh and pass a detailed speaking order in each of the matters in light of the observations made hereinabove.

6. In view of the above and for the reasons stated above, question No.1 is answered against the revenue and in favour of the assessee and it is held that in case and having satisfied that delay in not disposing of the appeal within 365 days (total) from the date of grant of initial stay is not attributable to the appellant / assessee in whose favour stay has been granted and that the Appellate Tribunal is satisfied that such appellant / assessee has fully cooperated in early disposal of the appeal and/or has not indulged into any delay tactics and/or has not taken any undue advantage, the learned Appellate Tribunal may, by passing a speaking order as observed hereinabove, extend stay even beyond the total period of 365 days from the date of grant of initial stay. However, as observed by the Hon'ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (supra), it should not be construed that any latitude is given to the Appellate Tribunal to extend the period of stay except on good cause and if the Appellate Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Appellate Tribunal for the reasons not attributable to the assessee. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. On expiry of every 180 days the concerned assessee / appellant is required to submit an appropriate application before the learned Appellate Tribunal to extend the stay granted earlier and the Appellate Tribunal may extend the stay for a further period but not beyond 180 days at a stretch and on arriving at the subjective satisfaction, as stated hereinabove, the Appellate Tribunal may extend the stay even beyond 365 days from the date of grant of initial stay and even thereafter. Meaning thereby after 180 days, the Appellate Tribunal is required to review the situation and consider the application for extension of stay appropriately. Thus, on expiry of maximum period of 180 days the assessee / appellant is required to submit application for extension of stay each time and the Appellate Tribunal, is required to consider the individual case and pass a speaking order, as stated hereinabove. By the aforesaid it may also not be understood that the Appellate Tribunal may go on extending the stay indefinitely and may not dispose of the appeals within stipulated time i.e. within 365 days from the date of grant of initial stay and/or at the earliest. All efforts shall be made by the learned Appellate Tribunal to dispose of the appeals at the earliest more particularly in a case where stay is operative against the revenue. The learned Appellate Tribunal and/or registrar of the Appellate Tribunal is required to maintain separate register with respect to the appeals in which stay has been granted fully and/or partially and appeals in which no stay has teen granted and the Appellate Tribunal must and shall give priority to the appeals in which stay has been granted, continued and/or extended. So far as the Question No.2 is concerned, i.e. Whether the learned Appellate Tribunal is required to pass a speaking order while extending stay or not, for the reasons stated above, the said question is answered in favour of the revenue - department and against the assessee. Consequently, all the matters are remanded to the learned Appellate Tribunal to pass appropriate order afresh and pass speaking and reasoned order in light of the observations made hereinabove. Such exercise shall be completed within a period of two months from today. So as to see that the applications of the respective appellants / assesses for extension of stay do not become infructuous, it is directed that the stay order which is extended by the Appellate Tribunal shall be continued for a further period of two months. It goes without saying that even during the aforesaid period of two months, the Appellate Tribunal may dispose of the appeals finally. All these appeals are partly allowed to the aforesaid extent and the matters are remitted back to the file of the learned Appellate Tribunal for passing orders afresh, as stated above.

4. In view of the above directions contained in the Hon'ble High Court's order, the matter was listed for hearing on 31.07.2014 and the advocate appearing on behalf of the appellant argued that appellant is not at fault as the case has never been listed for final disposal.

5. Learned AR appearing on behalf of the Revenue argued that extension sought for by the appellant should not be allowed now, even if the extensions were earlier allowed by the Bench as the statutory provisions do not permit it.

6. Heard both sides and perused the case records. It is observed from the case records that the stay was granted to the appellant on 16.04.2012. After granting of stay to the appellant this appeal has never been listed for final hearing. The appeal could not be listed for final hearing by the Registry due to heavy work load as the appeals filed for the earlier period are being listed. Hon'ble Gujarat High Court have held that extension can be allowed by the Bench looking to the facts and circumstances of this case, there is no fault of the appellant in seeking extension of the stay already granted. The request made by the appellant is genuine and extension of stay is granted for a further period of 180 days.

(Order pronounced in the Court on 2.9.2014.)

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