Tribunal power to extend stay beyond 180 days under Central Excise law despite automatic vacation provision.

Section 35C(2A) of the Central Excise Act, 1944 was read as providing automatic vacation of stay on expiry of the prescribed period, but not as imposing an absolute bar on further extension. The Tribunal reasoned that its inherent power to protect recovery proceedings would be ineffective if continuation beyond 180 days were prohibited, and it followed earlier decisions recognising power to extend stay to avoid injustice to the appellant. The competing interpretation was noted, and the issue was referred to the President for placement before a Larger Bench to resolve the conflict.

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Issues: Whether the Tribunal has power to extend a stay order beyond 180 days in the context of Section 35C(2A) of the Central Excise Act, 1944.

Analysis: The order held that Section 35F of the Central Excise Act, 1944 enables dispensation of pre-deposit, and that the Tribunal's inherent power to grant stay of recovery would be rendered ineffective if continuation beyond 180 days were treated as impermissible. It was reasoned that the proviso to Section 35C(2A) provides for automatic vacation of stay on expiry of the period, but does not impose a positive bar on the Tribunal from granting further extension. The order also distinguished the contrary view and followed the earlier decisions recognising the Tribunal's power to extend stay to avoid injustice to the appellant.

Conclusion: The Tribunal has the power to extend stay beyond 180 days.

Final Conclusion: The order favoured the appellant on the legal question of maintainability of stay extension, but the matter was referred to the President for placement before a Larger Bench to resolve the conflicting interpretations.

Ratio Decidendi: The Tribunal's inherent power to stay recovery is not cut down by Section 35C(2A) so as to prohibit extension of stay beyond 180 days, because the provision contemplates automatic vacation rather than an absolute bar on further judicial extension.

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