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 & 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 & 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.
Sub-section (2A) of Section 35 C provides as follows:-
"(2-A)-The Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed:
Provided that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 35B, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order:
Provided further that if such 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.
Provided also that where such appeal is not disposed off within the period specified in the first proviso, the Appellate Tribunal may, on an application made in this behalf by a party and on being satisfied that the delay in disposing off the appeal is not attributable to such party, extend the period of stay to such period as it thinks fit, not exceeding one hundred and eighty five days, and in case the appeal is not so disposed off within the total period of three hundred and sixty five days from the date of order referred to in the first proviso, the stay order shall, on the expiry of the said period, stand vacated."
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.
In the present case, the facts would indicate that the appeal was initially listed before the Tribunal for final disposal on 7 February 2012. The appeal was, however, adjourned on 7 February 2012, 25 April 2012 and 17 September 2012 since the Tribunal was unable to take up the matter. There has been no negligence, default or wrongful conduct on the part of the petitioner.
However, learned counsel appearing on behalf of the revenue submits that the petitioner ought to have applied before the Tribunal for listing of the appeal or should have made an application for extension of stay. This argument does not impress us for the simple reason that in view of the provisions contained in the third proviso to sub-section (2A) of Section 35C, it would not have been open to the Tribunal to extend the stay beyond the period that has been prescribed. It is only the High Court which can, in an appropriate case, grant relief under Article 226 of the Constitution for any subsequent period. The appeal was listed before the Tribunal on diverse dates and it was the inability of the Bench of the Tribunal to dispose of the appeal which has led to the appeal remaining pending on the file. Hence, we are of the view that it would be a travesty of justice to saddle the petitioner with the consequence of the unconditional stay being vacated because of the inability of the Tribunal to dispose of the appeal.
For these reasons, we order and direct that in view of the unconditional stay which was granted by the Tribunal on 15 November 2011, no steps shall be taken for enforcing the demand in terms of the impugned direction dated 1 May 2014 of the Superintendent, Customs & Central Excise (Annexure-1) during the pendency of the appeal before the Tribunal. We, however, direct that the petitioner, or as the case may be, the revenue shall apply to the Tribunal together with a certified copy of this order for early listing of the appeal. Upon such an application being made, we would request the Tribunal to dispose of the appeal within a period of three months from the date a certified copy of this order is produced before the Tribunal.
The writ petition stands disposed of.