TMI Blog2014 (10) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal or other appropriate reasons. Appellant in whose favour an order of stay earlier granted stood vacated on expiry of 180 days or 365 days as the case may be, may present an application seeking extension of stay by pleading the necessary facts as would authorise the exercise of discretion by this Tribunal for grant of such extension. The Registry is directed to maintain a separate register to record data with respect to the appeals in which stay has been granted and other appeals where no stay is granted, so as to enable prioritised listing of appeals where stay has been granted, subject to infrastructure and organisational limitations of CESTAT - Following decision of Commissioner Versus Small Industries Development Bank of India [2014 (7) TMI 738 - GUJARAT HIGH COURT] and Commissioner of Central Excise Versus Disha Engineers [2014 (8) TMI 737 - GUJARAT HIGH COURT] - Matter remanded back - Decided in favour of assessee. - ST/312/2009, ST/55299/2013, ST/57314/2013, ST/97/2009, E/03612 of 2006 , E/02026 of 2007 , E/03793 of 2010 , E/00421- E/00422 of 2011 , E/2093 of 2011 , E/290 of 2012 , E/00660 of 2012 , E/00961 of 2012 ,E/01190 of 2012 ,E/01455-E/01456 of 2012 - INTERIM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 35B, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty 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:] 4. A third proviso was introduced to the above sub-section w.e.f. 10.05.2013, by Section 98 of the Finance Act, 2013 (17 of 2013). This proviso read: [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 eight-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. ] 5. In misc. orders dated 10.06.2014 and 18.06.2014 (as noticed in the referral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiver, either wholly or pro - tanto of the pre-deposit directed by the Tribunal on exercise of discretion) was repealed and a fixed pre-deposit regime came into existence. Section 35F as substituted w.e.f. 06.08.2014 reads: 35F. The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal - (i) under subsection (1) of section 35. unless the appellant has deposited seven and a half per cent of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank than the [Principal Commissioner of Central Excise or Commissioner of Central Excise]: (ii) against the decision or order referred to in clause (a) of subsection (1) of section 35B, unless the appellant has deposited seven and a half per cent, of the duly, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against: (iii) against the decision or order referred to in clause (b) of subsection (1) of section 35B, unless the appellant has dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve pre disposition, amendments to Section 35C(2A) would be prospective and inapplicable to appeals /applications for stay/extension of stay earlier granted, in respect of such appeals/ applications pending as on 06.08.2014 or in respect of applications for stay filed even after this date but in respect of an order of stay granted prior to 06.08.2014. 8. Reliance is placed for the above contention on the decision of the judicial committee in Colonial Sugar Refining Co. Ltd. v. Irving (1905) A.C. 369; of the Privy Council in Delhi Cloth and General Mills Co. Ltd. vs. Income-tax Commissioner, Delhi AIR 1927 P.C. 242; of the full Bench of the Calcutta High Court in Sardar Ali vs. Dolimuddin AIR 1928 Cal. 640 (F.B); the decision of a special Bench of the Madras High Court in In re: Vasudeva Samiar AIR 1929 Mad. 381 (S.B.); decision of a full Bench of the Allahabad High Court in Ram Singha vs. Shankar Dayal ALL 1928 AIR 437 (F.B), full Bench of the Nagpur High Court in Radhakisan vs. Shridhar, AIR 1950 Nag. 177 (F.B) full Bench of Punjab High Court in Gordhan Das v. The Governor General in Council AIR 1952 Punj. 103 (F.B), decisions of the Supreme Court in Janardan Reddy vs. The State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 (SC) and the speech of the Hon'ble Finance Minister while introducing the Finance Act, 2014, referred to by Shri J. K. Mittal, warrant no analysis. 11. In Ecom Gill Coffee Trading Pvt. Ltd., the issue before the Karnataka High Court was whether the ITAT had power to extend a stay granted, of realisation of the outstanding demand beyond the period of 365 days. The relevant provision of the Income Tax Act, 1961 which governs the lis presented to the Karnataka High Court reads: Provided also that if such appeal is not so disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty-five days, the order or stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. The aforesaid proviso was introduced into Section 254(2A) of the Income Tax Act, by the Finance Act, 2008 w.e.f. 1.10.2008. On behalf of the assessee it was contended inter alia that the decision of the Supreme Court in Kumar Cotton Mills Pvt. Ltd authorised ITAT to extend an interim ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of the dues from the assessee bank account and directed refund of the amount debited on 22.01.2014. 14. In CCE ST vs. Ford India Ltd. 2014-VIL-232-MAD-ST the Madras High Court considered a challenge by Revenue to an order of the Tribunal granting extension of stay. Interim order was initially granted by the Tribunal on 08.04.2009 and by further order dated 04.06.2014 was extended till disposal of the appeal. By yet another order dated 28.01.2014 the interim order was extended till disposal of the appeal, after recording that (because of the huge pendency of appeals before the Tribunal), the appeal could not be disposed of and extension is being granted, following the judgment in Kumar Cotton Mills Pvt. Limited. The Madras High Court rejected Revenue's challenge to the order of the Tribunal granting extension, with the following observations: 9. We find that the 3rd proviso has incorporated the language of the Supreme Court in para-6 as above to some extent and limit the period by which the Tribunal can extend the interim order. The principle laid down by the Supreme Court in relation to proviso 1 and 2 of sub-section (2A) has been applied to the 3rd proviso in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The High Court ruled that the third proviso must be construed as meaning that if the conditions mentioned therein are satisfied i.e. the appellate Tribunal is satisfied on an application by the assessee / appellant that delay in disposing of the appeal (within the total period of 365 days from the date of grant of initial stay) is not attributable to such party, and despite the fact that the assessee / appellant has cooperated, the Appellate Tribunal could not, for various reasons, dispose of the appeal within 365 days, the power of the Appellate Tribunal to extend stay even beyond 365 days is not circumscribed. The Court clarified that grant of extension is however subject to satisfaction of the Tribunal that the assessee / appellant was not at fault and the delay in not disposing of the appeal is not attributable to such assessee / appellant. Before the Gujarat High Court, Revenue relied on the Karnataka High Court decision in M/s Ecom Grill Coffee Trading Pvt. Limited. Gujarat High Court distinguished the Karnataka High Court judgment with the following observations: However, in the said decision, Karnataka High Court did not follow the decision of the Supreme Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 tune 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The decision of the Gujarat High Court in Commissioner vs. Small Industries Development Bank of India - 2014-TIOL-1102-HC-AHM-CX which analysed the text and scope of the third proviso to Section 35C(2A) of the Act in juxtaposition with the provisions of Section 254(2A) of the Income Tax Act was also not brought to the notice of the Allahabad High Court. It also requires to be noticed that the relevant provision in the Income Tax Act reads as follows: Provided also that if such appeal is not disposed of within the period allowed under the first proviso or the period or periods extended or allowed under the second proviso, which shall not, in any case, exceed three hundred and sixty five days, the order of stay shall stand vacated after the expiry of such period or periods, even if the delay in disposing of the appeal is not attributable to the assessee. (emphasis is added). The legislative mandate that the sunset period would operate even if the delay in disposing of the appeal is not attributable to the assessee , thus withdraws any residuary discretion available to the Income Tax Appellate Tribunal to grant extension after this period, in fact, para 11 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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