CIR NO.738/54/2003-CX, DT. 19/08/2003

Extension of Stay by CEGAT/CESTAT beyond 180 days

The question whether the Tribunal has powers to grant extension of stay beyond 180 days after insertion of Section 35C(2A) in the Central Excise Act, 1944 w.e.f. 11.05.2002, vide the Finance Act 2002, came up for consideration before the Tribunal in the case of M/s. Kumar Cotton Mills Pvt. Ltd. [2002 (146) ELT 438 (T)] and the Tribunal held in that case that :

(i) Where the Tribunal has made an order of stay prior to the amendment under Section 35C, i.e. 11.05.2002, the order would have validity until the disposal of the appeal and would not be hit by the second proviso to Section 35C (2A).

(ii) Where the order on the stay application is made after 11.05.2002, the Tribunal’s power to continue protection so given is not circumscribed and the Tribunal on an application being made by the applicant, is competent to extend the date of coverage of the stay order.

After obtaining the advice of the Ministry of Law and of the Learned Solicitor General of India, SLP against the said judgment has been filed by the Department in the Supreme Court. Subsequent to that, in some more cases also, where the Tribunal and granted extension of stay orders, SLPs have been filed in the Supreme Court.

On re-examination of the matter, it is felt that this is a general issue, which may be arising in a large number of cases, as stay application are normally filed by the parties in almost all cases, with their appeals. Moreover, the orders granting extension of stay are only interim orders and no revenue can really be said to be involved in such cases. Since the issue has already been raised before the Hon’ble Supreme Court by filing some SLPs, Board is of the view that more SLPs on this issue need not be filed in the Supreme Court. Since basically a question of law is involved it would be appropriate to file a Reference Application before the jurisdictional High Courts under Section 35H in respect of orders passed by the Tribunal before 01.07.2003 and Appeals before the jurisdictional High Courts under Section 35H in respect of orders passed by the Tribunal on or after 01.07.2003

I am therefore, directed to request you to advise all the Commissioners under your charge to take action accordingly.

Receipt of this Circular may please be acknowledged.

Sd/-
(Sungita Sharma)
Director (Review)

(Please refer CIR NO.756/72/2003-CX, DT. 16/10/2003 for Extension of stay by CEGAT /CESTAT beyond 180 days)

[F. No. 387(W)/64/2003-JC]

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