GARG INDUSTRIES Vs. UNION OF INDIA

JUDGEMENT

(1.) FOLLOWING a notice to show -cause dated 5 February 2007, the Additional Commissioner, Central Excise, NOIDA passed an order of adjudication on 26 April 2010 confirming a demand for central excise duty in the amount of Rs. 17,25,261/ - together with interest and imposing a penalty of Rs. 17 lacs. The appeal was dismissed by the Commissioner (Appeals) on 30 September 2010. The petitioner lodged an appeal before the Customs Excise and Service Tax Appellate Tribunal. The Tribunal by its order dated 15 November 2011 granted a dispensation from the pre -deposit of duty and penalties. The appeal was fixed for final disposal on 7 February 2012. On 7 February 2012, the appeal was adjourned to 25 April 2012. On 25 April 2012 the Bench of the Tribunal was not available and hence, the appeal was adjourned to 17 September 2012 as directed by the President. On 17 September 2012 the Bench of the Tribunal has recorded that since the Bench would not be available in the post lunch session, the appeal should be listed in due course for arguments. On 1 May 2014, the third respondent namely the Superintendent, Customs and Central Excise issued a notice to the petitioner, relying upon the amended provisions of sub -section (2A) of Section 35C of the Central Excise Act, 1944, stating that since the appeal had not been disposed of within the period stipulated, the stay which had been granted stood vacated. The petitioners were, therefore, called upon to deposit the outstanding amount failing which recovery proceedings would be initiated in accordance with law.

(2.) SUB -section (2A) of Section 35C provides as follows:

(3.) UNDER the first proviso to sub -section (2A), the Appellate Tribunal is required to dispose of the appeal filed under sub -section (1) of Section 35B within one hundred and eighty days. Under the second proviso, if the appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated. Under the third proviso to sub -section (2A) of Section 35C, where the appeal is not disposed of within the period specified in the first proviso, the Tribunal may, on being satisfied that the delay in disposing off the appeal is not attributable to the party, extend the period of stay by a further period not exceeding one hundred and eighty five days. Thereafter, in case the appeal is not disposed of within the total period of three hundred and sixty five days from the date of the order referred to in the first proviso, the stay shall, on the expiry of the period, stand vacated. These provisions would indicate that the Tribunal may, in an appropriate case, extend the stay to cover a period not exceeding three hundred and sixty five days. This, however, would not exclude, in an appropriate case, the power of the High Court under Article 226 of the Constitution to pass a protective order provided the Court comes to the conclusion that the delay in the disposal of the appeal is not attributable to the conduct of the party which has obtained an order of stay. Undoubtedly, where the delay has been occasioned by the conduct of the party itself, the Court would be justified in declining to extend the order of stay.