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December 2014

[2014] 36 STR 269 (All.) CC Customs & Ex. Kanpur vs. J P Transformers

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 2 mins
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The Tribunal does not have power to extend the Stay beyond the statutory period of 365 days.

Facts:
Revenue preferred the present appeal challenging the order of Tribunal extending period of Stay beyond 365 days ignoring the third proviso to section 35C (2A) of the Central Excise Act, 1944. Further, no reason was given for not disposing appeal within 365 days.

Held:
The third proviso undoubtedly bars and prohibits Tribunal from extending the interim Stay Order beyond 365 days. It stipulates deemed vacation and imposes no fault consequences in strict terms. In the instant case, Tribunal had recorded finding that it could not dispose appeal for no fault of the assessee. The Supreme Court in case of Kumar Cotton Mills P. Ltd. 2005 (180) ELT 434 (SC) held that the amendment in third proviso to section 35C(2A) of the Central Excise Act, cannot be interpreted to give powers to the Tribunal to extend the Stay Orders indefinitely. The Tribunal was directed to dispose of the Appeal expeditiously.

(Note: On an identical issue, the Karnataka High Court in CIT, Bangalore vs. Ecom Gill Coffee Trading P. Ltd 2014 (35) STR 320 and the Delhi High Court in Comm. of Income Tax-II vs. Maruti Suzuki (India) Ltd. 2014 (35) STR 284 had held that the Tribunal cannot extend the Stay beyond statutory period of 365 days.)

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