Gujarat High Court
Commissioner Of Central Excise ... vs Kumar Cotton Mills (P) ... on 10 November, 2014
Author: Akil Kureshi
Bench: Akil Kureshi, Vipul M. Pancholi
O/TAXAP/1122/2014 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 1122 of 2014
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COMMISSIONER OF CENTRAL EXCISE AHMEDABAD I....Appellant(s)
Versus
KUMAR COTTON MILLS (P) LTD....Opponent(s)
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Appearance:
MR HRIDAY BUCH, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
Date : 10/11/2014
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI) The department has filed this appeal suggesting the following question of law for our consideration :
"(A) Whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) West Zonal Bench, Ahmedabad, while passing Misc. Order No. M/10187-10196/2014 dated 06.012014 passed in Appeal No.E/1043 to 1044/2007 is right in extending stay beyond the period of 365 days in violation of statutory provisions contained in Section 35C(2A) of the Central Excise Act, 1944?"
This issue, however, is no longer res integra. Different High Courts have though taken slightly different views insofar as this High Court is concerned in case of Commissioner vs. Small Page 1 of 4 O/TAXAP/1122/2014 ORDER Industries Development Bank of India reported in 2014 (307) ELT 417, it clearly held that the Tribunal in appropriate cases may extend the stay even beyond 365 days from the date of initial grant of stay. The Court held and observed as under:
"6. In view of the above and for the reasons stated above, question No.1 is answered against the revenue and in favour of the assessee and it is held that in case and having satisfied that delay in not disposing of the appeal within 365 days (total) from the date of grant of initial stay is not attributable to the appellant / assessee in whose favour stay has been granted and that the Appellate Tribunal is satisfied that such appellant / assessee has fully cooperated in early disposal of the appeal and/or has not indulged into any delay tactics and/or has not taken any undue advantage, the learned Appellate Tribunal may, by passing a speaking order as observed hereinabove, extend stay even beyond the total period of 365 days from the date of grant of initial stay. However, as observed by the Honble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (supra), it should not be construed that any latitude is given to the Appellate Tribunal to extend the period of stay except on good cause and if the Appellate Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Appellate Tribunal for the reasons not attributable to the assessee. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. On expiry of every 180 days the concerned assessee / appellant is required to submit an appropriate application before the learned Appellate Tribunal to extend the stay granted earlier and the Appellate Tribunal may extend the stay for a further period but not beyond 180 days at a stretch and on arriving at the subjective satisfaction, as stated hereinabove, the Appellate Tribunal may extend the stay even beyond 365 days from the date of grant of initial stay and even thereafter. Meaning thereby after 180 days, the Appellate Tribunal is required to review the situation and consider the application for extension of stay appropriately. Thus, on expiry of maximum period of 180 days Page 2 of 4 O/TAXAP/1122/2014 ORDER the assessee / appellant is required to submit application for extension of stay each time and the Appellate Tribunal is required to consider the individual case and pass a speaking order, as stated hereinabove. By the aforesaid it may also not be understood that the Appellate Tribunal may go on extending the stay indefinitely and may not dispose of the appeals within stipulated time i.e. within 365 days from the date of grant of initial stay and/or at the earliest. All efforts shall be made by the learned Appellate Tribunal to dispose of the appeals at the earliest more particularly in a case where stay is operative against the revenue. The learned Appellate Tribunal and/or registrar of the Appellate Tribunal is required to maintain separate register with respect to the appeals in which stay has been granted fully and/or partially and appeals in which no stay has been granted and the Appellate Tribunal must and shall give priority to the appeals in which stay has been granted, continued and/or extended."
Learned counsel for the department would, however, argue that the Tribunal has passed the said order mechanically without assigning any reasons. The Tribunal would extend the stay only for proper reasons to be recorded. In the present case, no such reasons have been recorded. In this context, the counsel relied on the following observations of this Court in case of Commissioner vs. Small Industries Development Bank of India (supra) :
"7. So far as the Question No.2 is concerned, i.e. Whether the learned Appellate Tribunal is required to pass a speaking order while extending stay or not, for the reasons stated above, the said question is answered in favour of the revenue department and against the assessee. Consequently, all the matters are remanded to the learned Appellate Tribunal to pass appropriate order afresh and pass speaking and reasoned order in light of the observations made hereinabove. Such exercise shall be completed within a period of two months from today. So as to see that the applications of the respective Page 3 of 4 O/TAXAP/1122/2014 ORDER appellants / assesses for extension of stay do not become infructuous, it is directed that the stay order which is extended by the Appellate Tribunal shall be continued for a further period of two months. It goes without saying that even during the aforesaid period of two months, the Appellate Tribunal may dispose of the appeals finally.
In view of the decision of this Court in case of Commissioner vs. Small Industries Development Bank of India (supra) it can be concluded that the Tribunal did not lack the power to extend stay beyond 365 days from the initial date of granting stay. However, if the stand of the revenue is that such extension was without recording reasons or without passing speaking order as required by the decision of this Court in case of Commissioner vs. Small Industries Development Bank of India (supra) it would be open for the Department to move a rectification application before the Tribunal.
With above observations, this tax appeal is disposed of.
(AKIL KURESHI, J.) (VIPUL M. PANCHOLI, J.) (vjn) Page 4 of 4