TaxTMI 
TaxTMI 
2014 (12) TMI 75
X X X X Extracts X X X X
X X X X Extracts X X X X
....of stay cannot be granted in view of the second proviso to Section 35C(2A) brought in by way of amendment in the Budget of 2013. Thereafter all the stay extension applications had been adjourned to 29-5-2014 with a view to hear all the appellants together so that conclusions can be reached as to whether decision of the Hon'ble High Court of Allahabad has to be followed or not and whether the decision of Hon'ble Allahabad High Court really meant that the Tribunal has no power to grant extension of stay beyond the period of one year under Section 35C of Central Excise Act, 1944. 2. Accordingly today more than 100 applications for extension of stay were listed and several advocates are present in the Court who represent all these assessees. Accordingly after consultation with both the sides, it was decided that the Tribunal can pass a general order as regards applicability of the decision as well as the submissions of the Authorised Representatives (ARs) of the Department in terms of the decision of the Hon'ble High Court are correct or not and thereafter individual applications may be considered in the light of the conclusions that we reach after hearing both the sides. It wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as brushed aside by the Bench observing that it was 'a decision given in a vacuum' in the absence of a dispute and therefore not binding precedent for co-ordinate Benches. In coming to the above conclusion the reasoning is that the orders of stay which came up for consideration before the Bench in Kumar Cotton Mills Pvt. Ltd. were all passed before insertion of sub-section (2A) of 35C and therefore, has no relevance for considering the effect of sub-section 2A. Reliance placed by the parties on Himalaya International was rejected on the ground that it is not a reasoned order. Relying on a decision of the Orissa High Court in CCE & C v. Golden Hind Shipping (India) Pvt. Ltd., 1993 (68) 739 (Ori.) the Bench declined to accept the contention raised by the assessee on the basis of the ratio of the decision in ITO Ltd. v. M.K. Mohammed Kunhi. But it is relevant to note that even though Kumar Cotton Mills had relied on a direct decision of the Delhi High Court in ITC v. UOI regarding the inherent power of this Tribunal to grant stay while exercising jurisdiction under Section 35C, no reference is seen to the above decision in Themis Pharmaceuticals. 5. With great respect to the l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....180 days the amendment would become redundant is also not justified. A similar contention raised in regard to sub-section (2A) of Section 254 of the Income Tax Act was not accepted by the Income Tax Appellate Tribunal in Centre for Women's Development Studies. The inherent jurisdiction of the Tribunal to grant interim relief so as to make the ultimate relief effective cannot be curtailed indirectly by sub-section (2A). At the end of the period of 180 days when the appellant makes an application for extension of the stay the Tribunal can always consider whether there is any change in the circumstances which would justify extension or modification of the stay. The Revenue gets an opportunity to bring to the notice of the Tribunal such changed circumstances e.g. a binding decision on the issue in its favour. Thereafter even though the Tribunal Benches have been passing orders that the recovery of dues is stayed during the pendency of appeal, in some of the Benches there is a practice of filing applications for extension of stay after 180 days and in some cases, there is no such practice. For example, in Karnataka, there is no such practice of filing of extension of stay application....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d of six months from the date of the extension dated 3-6-2013. The waiver of pre-deposit will continue to be valid up to the period of six months from its last extension dated 3-6-2013. This was the decision cited before us when the extension of stay applications listed. The points raised today, arguments advanced and our conclusions are discussed herein below : 8. The first point that was submitted was that the decision of the Hon'ble High Court of Allahabad was considered by this Tribunal and in Misc. Order Nos. 50461-50462/2014-CU(DB), dated 3-2-2014 [2014 (35) S.T.R. 380 (Tribunal)] in the case of Suresh Jaiswal and this Tribunal after considering the decision of the Hon'ble High Court of Allahabad and also the decision of the Hon'ble Supreme Court in the case of Kumar Cotton Mills (supra) and also statutory provisions came to the conclusion that the legislative provisions clearly signal the need for caution and circumspection while extending a stay granted but perhaps are not to be interpreted as inhibiting grant of extension or of a fresh grant of stay, after the period of 365 days from the date on which stay was initially granted. It was submitted that in view of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, this submission would have to be accepted and upheld. However, our observations about the provisions of Section 35C over the years and the decision of the Hon'ble Supreme Court in the case of Kumar Cotton Mills (supra) have shown clearly that power to grant stay is an inherent power and if when there was a similar provision of restricting the power to 180 days and providing for automatic vacation of stay after 180 days, if the Hon'ble Supreme Court took the view that after 180 days the Tribunal had the power to extend the stay, it is difficult to accept the submission that the inherent power of stay would vanish when the legislature adds a second proviso which is somewhat similar to the first proviso and not different at all. This is the view taken by the Tribunal in the Misc. Order dated 3-2-2014 cited by the learned counsels for the appellants and we find ourselves in full agreement with this view and respectfully follow this view. 14. At this stage, it would be appropriate to take note of the submissions by the advocates for the appellants wherein it was pointed that a comparison between the provisions of Karnataka VAT Act and Central Excise Act would show that the ab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hheld. The said provisions act in terrorem preventing the assessee from delaying the disposal of the appeal. But if the assessee is not at fault and the Tribunal for reasons beyond its control is unable to dispose of the appeal within 180 days from the date of the grant of order of stay, the Tribunal cannot be held to be powerless to extend the order of stay granted on an application being made for extension of stay by the assessee. Merely because there is no express provision provided for extending stay granted earlier, it cannot be said that the appellate Tribunal has no power to extend the time. Prior to amendment in the absence of any specific provision it was granting stay. If the Tribunal is held to possess the power to grant stay, on the same analogy, the Tribunal is held to possess power to extend the order of stay granted, if the appeal is not disposed of within 180 days from the date of the stay order. 13. In such circumstances, if an application is made by the assessee, the Tribunal has the power to extend the order of stay. The order of stay is not automatic. Therefore, even an order of extension of stay need not be automatic. When an application is filed for ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion, these decisions also support the claim of the appellants that application for extension of stay has to be considered and Tribunal can consider the same and grant extension. 18. Another decision which has been rendered after the amendment and referred to by the counsels for the appellants is the decision in the case of Chhote Lal Virendra Kumar Jain v. UOI & Ors. [2014-TIOL-647-HC-RAJ-ST]. In this decision, taking note of the amendment made by Finance Act, 2013, Hon'ble High Court observed in paragraph 14 as follows :- 14. It appears that the provision has been made for the purpose of curbing dilatory tactics of such of the assessees who after getting interim order in their favour to continue by delaying the disposal of the proceedings and that certainly deprive the revenue not only of the benefit of the assessed value but at the same time of the decision on point which may have impact on other pending matters. But, at the same time, the third proviso has been inserted in Sec. 35C(2A) by the Finance Act, 2013 cannot be construed as punishing the assessees for matters which may be completely beyond their control and we can take judicial notice of pendency of appe....