- (1.) We have heard Shri B.K.S. Raghuvanshi, learned counsel for the Central Excise Department. This appeal under Section 35G of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 arises out of order passed by the Central Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi dated 3-6-2013 by which it has extended the waiver of pre-deposit of assessed demand vide order dated 21-9-2012 on the ground that appeal could not be disposed of within 365 days for no fault of the assessee and that a prima facie case in favour of the assessee was recorded in the earlier order dated 21-9-2012. The appeal has been preferred on following substantial question of law:-- "Whether the Hon'ble CESTAT has erred in granting waiver of pre-deposit of assessed demand in favour of the respondents during pendency of the appeal thereby extending the period of stay beyond 365 days ignoring the recent amendment to Section 35C of the Central Excise Act, 1944?" The question of law raised in the appeal calls for interpretation of Section 35C of the Central Excise Act, 1944. The question has been decided by Hon'ble Supreme Court in Commissioner of Cus. & C. Ex., Ahmedabad v. Kumar Cotton Mills Pvt. Ltd., 2005 180 ELT 434(S.C.). The Supreme Court considered the effect of Second Proviso to Section 35C(2A) of the Central Excise Act, 1944 and held as follows:-- "6. The sub-section which was introduced in terrorem cannot be construed as punishing the assessees for matters which may be completely beyond their control. For example, many of the Tribunals are not constituted and it is not possible for such Tribunals to dispose of matters. Occasionally by reason of other administrative exigencies for which the assessee cannot be held liable, the stay applications are not disposed within the time specified. The reasoning of the Tribunal expressed in the impugned order and as expressed in the Larger Bench matter, namely, IPCL v. Commissioner of Central Excise, Vadodara cannot be faulted. However we should not be understood as holding that any latitude is given to the Tribunal to extend the period of stay except on good cause and only if the Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Tribunal for reasons not attributable to the assessee." Thereafter, third proviso in Section 35C(2A) has been inserted by the Finance Act, 2013 as follows:-- "Provided also that where such appeal is not disposed of 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 of the appeal is not attributable to such party, extend the period of stay to such further period, as it thinks fit, not exceeding one hundred and eighty- five days, and in case the appeal is not so disposed of 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."
(2.) It is submitted by learned counsel for the Central Excise Department that the Tribunal has not given any reasons as to why it could not dispose of the appeal within 365 days and further the waiver of pre-deposit could not be made for indefinite period defeating object of second and third Proviso to Section 35C(2A) of the Act.
(3.) In the present case the Tribunal has recorded finding that appeal could not be disposed of within 365 days for no fault of the assessee and thus the assessee could not be penalised for vacating the stay order. We find justification in the prayer made by the department that the Tribunal should not have extended the order by which it had waived the pre-deposit of the assessed demand indefinitely. Such an order is likely to be misused by the assessee.;