TMI Blog2010 (8) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no requirement to pass any order extending the stay of recovery already ordered and the stay of recovery shall remain valid till the final disposal of the appeal. 2. The assessee is a holder of Central Excise Registration Certificate. It is carrying on the business of procuring and clearing various petroleum products such as motor spirit, high speed diesel, kerosene, furnace oil, etc., to their depots/company owned company operated retail pump outlets/jubilee outlets (COCO RPOs for short) located at various places. The said products are subsequently sold from their depots to their rental outlets. The assessee was issued with a show-cause notice demanding the differential duty of Rs. 7,83,142/- (CENVAT Rs. 6,00,320.42 + SED Rs. 1,82,821.58) for the period 1-8-2001 to 28-2-2002 under the provisions of Section 11A apart from demanding interest at the rate of 24% under Section 11AB and proposal for penalty under Rule 25 of CE(2) Rules, 2001. The assessee gave his reply opposing the said claim. The Assistant Commissioner of Central Excise by his order dated 28-1-2003 held that the price charged in respect of motor spirit and high speed diesel at their COCO (Company Owned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and therefore, the impugned order passed is ex facie, illegal and liable to be set aside. He also contended that, when once it is specifically provided by way of amendment that the said order shall come to an end with the expiry of 180 days from the date the order is passed, in the absence of any provision for extension of the stay order or in the absence of any power, conferred on the Tribunal to extend the stay order granted earlier, the Tribunal extending the stay order would not arise and therefore, he contends, seen from any angle, the impugned order requires to be set aside and the application for stay is liable to be dismissed. 4. Per contra, the learned counsel appearing for the assessee submitted, though in Section 35C before amendment and after amendment, there is no express provision conferring power on the Tribunal to extend the stay order granted earlier, the Tribunal in exercise of its appellate power has inherent power to grant an order of stay as well as to extend the stay granted earlier. In the absence of any specific provision prohibiting such extension, the power to extend stay is to be gathered from the appellate power as well as the inherent power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al authorities are set aside. It is difficult to conceive that the legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion. The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the Appellate Tribunal under Section 220(6) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income-tax Officer. It is a firmly established rule that an express grant of statutory power carries with it by necessary implications the authority to use all reasonable means to make such grant effective. The powers which have been conferred by Section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers fully effective". In the end, the Supreme Court has held as under : "Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt of appeal to grant stay at page 443 : "it appears to me on principle that the Court ought to possess that jurisdiction, because the principle which underlies all orders for the preservation of property pending litigation is this, that the successful party in the litigation, that is, the ultimately successful party, is to reap the fruits of that litigation, and not obtain merely a barren success". That principle, as it appears to me, applies as much to the Court of first instance before the first trial, and to the Court of Appeal before the second trial, as to the Court of last instance before the hearing of the final appeal". 7. The right of appeal is a substantive right, and the question of fact and law are at large and are open to review by the Appellate Tribunal. It is firmly established rule that an express grant of statutory power carries with it by necessary implications the authority to use all reasonable means to make such grant effective. One such authority is the duty in proper cases to make such orders for staying proceedings as will prevent the appeal, if successful from being rendered nugatory. Therefore, the appellate Tribunal has the power to grant sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee who has the benefit of an order of stay would not drag an the proceedings, the legislature thought of introducing second proviso with an intention of curbing delaying tactics in disposal of the appeal. Therefore, it is expressly provided, if the appeal is not disposed of within 180 days from the date of the said order, on expiry of that period, the stay order stands vacated. The sole object being to ensure disposal of the appeals on merits within 180 days thus preventing the assessee from indulging any dilatory tactics. Therefore, this provision was introduced in terrorem. 10. The Supreme Court in the case of Commissioner of Cus. C.Ex., Ahmedabad v. Kumar Cotton Mills Private Limited reported in 2005 (180) E.L.T. 434 (S.C.) dealing specifically with the amended provision, held as under : "3. The provision has clearly been made for the purpose of curbing the dilatory tactics of those assessees who, having got an interim order in their favour, seek to continue the interim order by delaying the disposal of the proceedings. Thus, depriving the revenue not only of the benefit of the assessed value but also a decision on points which may have impact on other pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote of the fact that it is practically not possible to dispose of the appeals pending before the Bombay Bench of the Tribunal within 180 days. The Bench has also suggested some remedy for the problem. In this connection, we may observe that similar situation can arise in other Benches also where an appeal posted within 180 days could not be taken up for different reasons. It may be due to non-availability of time for the Bench or due to non-availability of the Bench itself. Unless the Tribunal has the power to extend stay beyond 180 days, the assessee's interest will be in jeopardy for no fault of his. Even the order granting exemption from pre-deposit will be rendered nugatory as the assessee will be compelled to satisfy the demand during dependency of the appeal. It has been always the judicial view that no party should be prejudiced due to action or inaction on the part of the Court (Rajkumar Dey and Others v. Tarapada Dey) 1987 (4) S.C.C. 398. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery proceedings are initiated by the revenue, the assessee was compelled to file an application for extension of stay. Without considering the said application on merits, the Tribunal proceeded to hold that once an order of stay is granted after hearing both the parties, the said stay order will be in operation till the disposal of the appeal on merits, relying on the judgment of the Gujarat High Court referred to above. It is a cleat case of misreading of the judgment. That was the position prior to the amendment. In the aforesaid Gujarat case, the order of stay was granted in the year 1996 and therefore, in that case, the Gujarat High Court was justified in holding when once an order of stay is granted after hearing both the parties, there is no requirement to pass any order extending stay of recovery already ordered and that, such stay of recovery shall remain valid till final disposal of the appeal and has refrained the Department from proceeding with the recovery proceedings pending disposal of the appeal on merits. In the very same judgment, they have also pointed out the difference after the amendment. Therefore, after the amendment, the stay order granted comes to an end at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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