By TIOL News Service

MUMBAI, MAR 24, 2014: AGAINST the order passed by the CCE, Raigad , confirming the duty and imposing penalty/interest, the appellant had filed a Stay application & an appeal before the CESTAT in the year 2010.

Vide an order dated 20.06.2011, the CESTAT had granted a Stay in the matter from pre-deposit of interest and penalty as the duty demanded was already paid by the applicant.

This Stay granted was extended, till the disposal of the appeal, by the Bench in November, 2013.

In spite of the above orders of the CESTAT, the jurisdictional Range Superintendent addressed a letter to the applicant directing him to make payment of interest and penalty citing the amended provisions of section 35C of the CEA, 1944 and in terms of which if the appeal is not disposed of within the total period of three hundred and sixty-five days of the stay order, the stay order shall, on the expiry of the said period, stand vacated.

And, therefore, the appellant has filed a Miscellaneous Application bringing to notice of the Bench the aforesaid action initiated by the Department and seeking a restraining direction in the matter. The appellant also adverted to the decision of the Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd. - (2005-TIOL-42-SC-CESTAT) and submitted that their appeal is pending not on account of any fault on their part but because of the huge pendency of appeals in the Tribunal.

The Bench observed -

“ 2. …In the present case, there are more than 20,000 appeals pending before the Mumbai Bench of this Tribunal and the delay in disposal of the appeal is not due to any fault on the part of the appellant assessee. Therefore, the ratio laid down by the Hon'ble Apex Court in Kumar Cotton Mills (supra) squarely applies. In a recent decision, the Hon'ble Bombay High Court also held that the recoveries can be effected if stay has expired only with respect to the duty amount and not with respect to interest and penal liabilities in the case of India Steel Works Ltd. - 2014-TIOL-24-HC-MUM-CX.”

Noting that in the present case, the appellant had already paid the duty amount and stay granted is in respect of only interest and penal liability, the Bench restrained the department from proceeding with any coercive measures for recovery of the dues adjudged against the appellant.

The miscellaneous application was accordingly allowed.

(See 2014-TIOL-440-CESTAT-MUM)