2014 (7) TMI 747 - AT - Service Tax

CESTAT to Review Stay Extension Issue Beyond 365 Days

M/s RK AND SONS Versus COMMISSIONER OF CENTRAL EXCISE

The Appellate Tribunal CESTAT New Delhi referred the issue of extending stay beyond 365 days under Section 35C(2A) of the Central Excise Act to a Larger ... Tribunal's power to grant Stay beyond 365 days - matter referred to Larger Bench - Tribunal had earlier concluded that CESTAT had no jurisdiction to extend operation of a stay beyond the period of 365 days of the initial grant, in view of provisions of the 3rd proviso to Section 35C(2A) of the Central Excise Act, 1944 - Held that:- prima-facie case warranting reconsideration of the conclusion recorded in in appeals preferred by M/s Rajasthan State Industrial Development & Investment Corporation Limited [2014 (7) TMI 621 - CESTAT NEW DELHI], in the light, of the fact that the language of the third proviso to Section 35C(2A) of the 1944 Act the third proviso to Section 254(2A) of the Income Tax Act, 1961, is distinct and this distinction has a bearing on the interpretation of the 3rd proviso to Section 35C(2A) of the 1944 Act. Since we discern a strong prima-facie case in support of the proposition that the Tribunal has the power to grant extension of stay beyond the period of 365 days from the initial grant of stay (wherever the delay in disposal of an appeal is not on account on any fault of the assessee), inter-alia , in the light of the decision of the Bombay High Court in Narang Overseas (P) Ltd., (2007 (7) TMI 5 - HIGH COURT, BOMBAY), we direct the respondents in the application/appeal not to take any coercive steps for realisation of the assessed liabilities, till disposal of the issue referred hereby to the Larger Bench. Issues:Extension of stay beyond 365 days under Section 35C(2A) of the Central Excise Act, 1944.Analysis:The judgment by the Appellate Tribunal CESTAT New Delhi addressed the issue of extending stay beyond the initial 365 days under Section 35C(2A) of the Central Excise Act, 1944. The Tribunal had previously rejected applications for such extensions based on High Court decisions from Karnataka and Delhi. These decisions concluded that the Tribunal lacked jurisdiction to extend the stay beyond the initial 365 days, as per the 3rd proviso to Section 35C(2A) of the Act. The present applications sought to extend the stay beyond the specified period. The appellants argued that the provisions of the Income Tax Act and the Central Excise Act were not identical, emphasizing the legal consequences of the differing phraseology in the two statutes. They referred to various court judgments to support their contention that the Tribunal retained the power to grant extensions even after the initial period.The Tribunal found a strong prima facie case for reconsideration of its earlier decisions, noting the distinct language in the provisions of the Income Tax Act and the Central Excise Act. As a result, the Tribunal decided to refer the issue of interpreting the 3rd proviso to Section 35C(2A) of the Central Excise Act to a Larger Bench for consideration. The issue referred for consideration was whether the Tribunal was disabled from granting extensions beyond 365 days, even if the delay in appeal disposal was not due to the appellant's conduct. The Tribunal also highlighted the relevance of previous court judgments in interpreting the provisions of the Central Excise Act, emphasizing the need for a comprehensive review by the Larger Bench.In response to the arguments presented by the Revenue, the Tribunal clarified that it was not dissenting from the Delhi High Court's judgment but was considering the differences in language between the Income Tax Act and the Central Excise Act. The Tribunal expressed a strong prima facie case supporting the proposition that it had the power to grant extensions beyond 365 days, especially when the delay was not the fault of the appellant. Citing the decision of the Bombay High Court, the Tribunal directed the respondents not to take coercive steps for recovery until the issue was resolved by the Larger Bench. The Tribunal's decision aimed to ensure a fair and thorough consideration of the legal provisions and precedents involved in extending the stay beyond the initial period under Section 35C(2A) of the Central Excise Act, 1944.