2004 (6) TMI 52 - AT - Central Excise

Tribunal Affirms Jurisdiction to Extend Stay Beyond 180 Days Under Central Excise Act, Upholds Kumar Cotton Mills Decision.

IPCL Versus COMMISSIONER OF CENTRAL EXCISE, VADODARA

The Tribunal determined it possesses jurisdiction to extend a stay beyond 180 days, despite the incorporation of sub-section (2A) in Section 35C of the ... Stay Order - Jurisdiction of the Tribunal to grant stay beyond 180 days after the incorporation of sub-section (2A) in Section 35C of the Central Excise Act - inherent power of the Tribunal as an appellate authority - HELD THAT:- We find that in Themis Pharmaceuticals [2003 (9) TMI 389 - CESTAT, MUMBAI] the Bench has taken note 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. On going through the decision rendered by a bench of two members in Kumar Cotton Mills Ltd.[2002 (10) TMI 116 - CEGAT, MUMBAI] we find that the Bench taking into consideration the importance of this issue permitted Advocates and Consultants not representing the applicants also to make submissions to assist the Court. A decision rendered after such hearing on the effect of the introduction of sub-section (2A) on the jurisdiction of the Tribunal as above should not have been just brushed aside as one rendered in 'vacuum'. Even if the Bench which heard Themis Pharmaceuticals took a different view, it should have referred the issue for consideration by Larger Bench as judicial decision would demand. Thus, we are inclined to uphold the view taken in Kumar Cotton Mills [2002 (10) TMI 116 - CEGAT, MUMBAI] and agree with the view expressed in the reference order on the jurisdiction of the Tribunal to pass interim order. We disagree with the view taken in Themis Pharmaceuticals. We, therefore, hold that the Tribunal has jurisdiction to grant stay even after the expiry of 180 days from the date of initial order of stay. After answering the issue raised for consideration by the Larger Bench, as above, we send back the Miscellaneous Application for hearing by the appropriate Bench. Issues Involved:1. Jurisdiction of the Tribunal to grant stay beyond 180 days after the incorporation of sub-section (2A) in Section 35C of the Central Excise Act.2. Interpretation of the inherent power of the Tribunal as an appellate authority to grant stay.3. Analysis of conflicting decisions by different Benches on the same issue.Summary:1. Jurisdiction of the Tribunal to Grant Stay Beyond 180 Days:The primary issue was whether the Tribunal has the jurisdiction to extend the stay beyond 180 days after the incorporation of sub-section (2A) in Section 35C of the Central Excise Act, effective from 11-5-2002. The Tribunal noted conflicting decisions: Kumar Cotton Mills Pvt. Ltd. v. CCE, Ahmedabad, which allowed extension, and Themis Pharmaceuticals v. CCE, Mumbai, which did not.2. Interpretation of Inherent Power of the Tribunal:In Kumar Cotton Mills Pvt. Ltd., it was held that the power to grant stay is part of the inherent power of the Tribunal as an appellate authority, even in the absence of a specific statutory provision. This view was supported by decisions such as ITC Ltd. v. UOI and ITO v. M.K. Mohammed Kunhi. The Tribunal emphasized that a party should not suffer adverse consequences due to the Tribunal's inability to hear the matter within 180 days.3. Analysis of Conflicting Decisions:Themis Pharmaceuticals dismissed the reliance on Kumar Cotton Mills Pvt. Ltd., stating it was a decision given in a vacuum and not a binding precedent. The Bench in Themis Pharmaceuticals argued that the orders of stay considered in Kumar Cotton Mills were passed before the insertion of sub-section (2A) of Section 35C, thus irrelevant for considering the effect of sub-section 2A. However, the Tribunal in the present case found this reasoning flawed and upheld the view in Kumar Cotton Mills, emphasizing the inherent jurisdiction of the Tribunal to grant interim relief.Conclusion:The Tribunal concluded that it has the jurisdiction to grant stay even after the expiry of 180 days from the date of the initial order of stay. The decision in Kumar Cotton Mills was upheld, and the view in Themis Pharmaceuticals was disagreed with. The matter was sent back to the appropriate Bench for further hearing.