2014 (10) TMI 803 - HC - Central Excise

High Court upholds Tribunal's stay order on government dues recovery. Emphasizes timely disposal. No pre-deposit required.

The High Court dismissed the revenue's appeal challenging the indefinite stay of proceedings granted by the Tribunal for the recovery of government dues ... Waiver of pre deposit - Extension of stay order - Tribunal allowed the stay application unconditionally while dispensing with the condition of pre-deposit of the entire amount of duty, interest and penalty - Whether the Tribunal is correct in granting indefinite stay of proceedings to the recovery of Govt. dues as adjudicated by the competent authority, contrary to the time limit prescribed under the provisions of the Central Excise Act, 1944 - Held that:- No doubt similar provision under Income Tax Act, 1961 or under this Act had been interpreted in favour of the revenue in the pronouncements cited by the learned counsel for the revenue. In the absence of any finding that the delay was attributed to the assessee, learned counsel for the revenue was not able to demonstrate that the assessee was responsible in delaying the decision of the appeal in any manner. Further, in M/s Maruti Suzuki (India) Limited [2014 (2) TMI 1037 - DELHI HIGH COURT] and M/s J.P. Transformers, Kanpur's case (2013 (10) TMI 1194 - ALLAHABAD HIGH COURT), the grant of ad interim stay was not vacated but the Tribunal was directed to decide the appeal expeditiously. - Tribunal to make sincere efforts for expeditious disposal of the appeal preferably within six months - Decided in favour of Revenue. Issues:1. Granting indefinite stay of proceedings contrary to time limit under Central Excise Act, 1944.2. Justification of the impugned order passed by the Tribunal.Issue 1: Granting Indefinite Stay of ProceedingsThe appeal was filed by the revenue challenging the Tribunal's order granting indefinite stay of proceedings for the recovery of government dues. The revenue argued that the stay granted was beyond the maximum period prescribed under Section 35C(2A) of the Central Excise Act, 1944. The revenue cited judgments from various High Courts to support their contention. However, the High Court found no merit in the appeal. It was noted that while similar provisions under the Income Tax Act had been interpreted in favor of the revenue in the cited judgments, there was no evidence attributing the delay to the assessee in this case. The court highlighted that the delay in deciding the appeal was not caused by the assessee. Additionally, in cases where ad interim stay was granted, the Tribunal was directed to decide the appeal promptly. The court directed the Tribunal to make sincere efforts for the expeditious disposal of the appeal, preferably within six months from the date of receipt of the order.Issue 2: Justification of the Impugned OrderThe facts of the case involved the assessee being engaged in the business of manufacturing certain goods subject to excise duty. Following an investigation, it was found that the goods manufactured were liable for excise duty beyond the exemption limit. The adjudicating authority confirmed the demand of duty, interest, and penalty. The assessee then filed an appeal with the Tribunal along with a stay application. The Tribunal initially allowed the stay application unconditionally, without requiring the pre-deposit of the entire amount. Subsequently, the revenue filed an application for vacation of the stay order, which was dismissed by the Tribunal. The High Court, after considering the arguments, upheld the Tribunal's decision, emphasizing that the delay in the appeal process was not the fault of the assessee. The court found the impugned order to be justified and in accordance with the law.In conclusion, the High Court dismissed the revenue's appeal, directing the Tribunal to expedite the disposal of the case within six months. The judgment highlighted the importance of prompt resolution of appeals while considering the circumstances of each case.