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23 Aug 2015

Tribunal has The Power to Grant Extension of Stay Beyond 365 Days"

In the recent judgment by Larger Bench of Hon’ble Delhi High Court in the matter of Commissioner of Central Excise, Delhi v. Brew Force Machine Pvt. Ltd. 2015-TIOL-1873-HC-DEL-CX-LB, it was held that CESTAT, while dealing with an application for stay, has the power and jurisdiction to grant stay beyond 365 days, when the assessee is not responsible for delay in disposing of the appeal, under Section 35C(2A) of the Central Excise Act.

Brief facts of the case are that the CESTAT, following the decision of Larger Bench of the CESTAT in the matter of Haldiram India Pvt. Ltd. V. CCE, Delhi – 2014-TIOL-1965-CESTAT-DEL-LB wherein the Larger Bench of CESTAT held that stay can be granted beyond 365 days under Section 35C(2A) of the CEA, allowed the Stay application filed by the assesse. Subsequently, the CCE, Delhi appealed against the said order of CESTAT.

Thereafter, the decision of Larger Bench of CESTAT was overruled by the decision of Division Bench of Delhi High Court in CCE, Delhi v. Haldiram India Pvt. Ltd. The division bench observed that provisions of Section 35C(2A) are identical to provisions of Section 254(2A) of the Income Tax Act, and the Delhi High Court in the matter of CIT v. Maruti Suzuki (India) Ltd. 2014-TIOL-246-HC-DEL-IT denied the power to grant stay beyond 365 days under Section 254(2A) of the IT Act.

While deciding the present appeal the Larger Bench of Delhi High Court observed that words ‘even if the delay in disposing of the appeal is not attributable to the assesse’ found in third proviso of Section 254(2A) were not found in third proviso of Section 35C(2A). Therefore, ratio of decision in Maruti Suzuki (India) Ltd. would not be applicable to CESTAT. Accordingly, the decision of division bench in CCE, Delhi v. Haldiram India Pvt. Ltd. was overruled.