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POWER OF CESTAT IN GRANTING STAY BEYOND 365 DAYS

Central Excise - By: - Mr. M. GOVINDARAJAN - Dated:- 25-12-2015 - Introduction Section 35C of Central Excise Act, 1944 deals with the order of the Tribunal. The power of granting stay by the CESTAT is given through Section 35C (2A) which has been inserted with effect from 01.05.2002. Section 35C(2A) has traversed the following stages: Sub-section (2A) was inserted with two provisos with effect from 01.05.2002; Third proviso to Section 35C(2A) was inserted vide Finance Act, 2013 with effect from .....

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require to dispose of the appeal within a period of 180 days from the date of such an order granting stay of recovery and under the second proviso it is laid down that in case of such appeal is not disposed within the period specified in the first proviso, on the expiry of the said period, the stay order shall stand vacated. In Poly Fill Sacks V. Union of India - 2005 (2) TMI 148 - GUJARAT HIGH COURT the High Court held that the scheme is that an appeal is required to be disposed within a period .....

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ost of reasons ranging from non availability of a Bench due to non appointment of adequate number of technical and or judicial members at a particular station to the quantum and quality of appeals at a particular station. The High Court held that the discretion available to CESTAT under Section 35C (2A) of the Act does not stand obliterated by insertion of the two provisos and more particularly by the second proviso. The High Court further held that sub-section (2A) Section 35C of the Act was br .....

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y manner. The object of the provision is for the curbing the dilatory tactics of assessees, who having obtained an interim order in their favor, seek to continue the interim order while delaying the disposal of the proceedings. However, in cases where the Revenue finds that a particular assessee having obtained stay is adopting dilatory tactics, it is always open Revenue to move the Tribunal in such an eventuality. The High Court held that the CESTAT is having power to grant stay exceeding 180 d .....

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ot 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. This has come to consideration of the High Court in Chhote Lal Virendra Kumar Jain V. Union of India - 2014 (5) TMI 262 - RAJASTHAN HIGH COURT the Tribunal granted stay on 20.09.2012. The petitioner filed an application .....

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beyond 365 days. The petitioner approached the High Court for the release of the bank account. The High Court held that the recovery proceedings of the Revenue could not be held justified in the eye of law and the Court found substance in the submission made by the petitioner after passing of the order by the Tribunal on 23.01.2014, the Revenue remain under obligation to refund the money which was recovered from the petitioner by debiting the petitioner s account in 22.01.2014 and the very init .....

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pact on the other pending matters. But at the same time it cannot be construed as punishing the assessees for matters which may be completely beyond their control. It is settled principles of law and which is consistent and recognized that where a case is not considered because of multiplicity of business of the court the party ought not to be prejudiced by that delay and when an act of the court can prejudice no man, ditto would be for an omission in keeping with the aforesaid principles that i .....

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n 35C (2A) of the Central Excise Act, 1944? 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 the third proviso to Section 35C (2A) of the Central Excise Act, 1944? The High Court observed that the third proviso to Section 35C(2A) which has come into effect from 10.05.2013 is to be construed by holding that if the con .....

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from the date of grant of initial stay are not circumscribed. However the same shall be subject to satisfaction of the learned Appellate Tribunal that the assessee appellant is not at all fault and the delay in not disposing of the appeal within total 365 days is not attributable to such assessee-appellant and that there was non co-operation on the part of the assessee-appellant. The High Court held that in a taxing matter any provision is required to be read literal and plain meaning should be .....

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ered the first question in favor of the assessee. In regard to the second question of law the High Court held that the Appellate Tribunal is required to consider the facts of each case 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 appellate assessee or not and/or whether the assessee-appellant in whose favor stay has been granted and/or whether such appellant is .....

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rly disposal of the appeal and/or has not indulged into any delay tactics and/or has not taken any undue advantage. Omission of three provisos Section 35F of the Central Excise Act, 1944 has been substituted vide Finance Act, 2014 with effect from 06.08.2014. According to the newly substituted section he Tribunal shall not entertain any appeal- 7.5% of the duty in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute for filing of appeal before the Comm .....

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ppellate authority prior to the commencement of the Finance (No.2) Act, 2014. According to the substituted Section 35F no stay petition could be filed before CESTAT in an appeal. The appellant is mandatorily required to pay the percentage of duty as discussed above. Unless the appellant deposited the said amount the appeal will not be entertained. However the second proviso that the newly substituted Section 35F would not applicable to the stay petitions filed before 06.08.2014. Latest position .....

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iolative of Article 14 of the Constitution of India. In Commissioner of Central Excise, Delhi V. Brew Force Machine Pvt. Ltd - 2015 (7) TMI 753 - DELHI HIGH COURT (delivered on 10.07.2015) the challenge in this appeal by the Commissioner of Central Excise (CCE), Delhi is to an order dated 5th January 2015 passed by the CESTAT whereby the Miscellaneous Applications for stay were allowed following the decision of the larger Bench of the CESTAT in Haldiram India Pvt. Ltd. v. CCE, Delhi -2014 (10) T .....

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ant Commissioner of Income Tax - 2015 (5) TMI 655 - DELHI HIGH COURT where the Court was concerned with the challenge to the constitutional validity of the third proviso to Section 254 (2A) of the IT Act on the ground that it sought to obliterate the distinction between Assessees who contributed to the delay in disposal of an appeal and those who had not. By the said judgment the Division Bench allowed the writ petitions and struck down the third proviso to Section 254 (2A) of the IT Act to the .....

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