Case Law Details
Vijayanagar Sugars Pvt Ltd Vs Commissioner of Central Excise, Customs And Service Tax (CESTAT Bangalore)
These applications of M/s Wellcast Steels Ltd, M/s Vijayanagar Sugars Pvt Ltd and of Shri R Rajendra Kumar under section 35F of Central Excise Act, 1944, read with section 35C(2A) of Central Excise Act, 1944 and with rule 41 of Customs Excise Service Tax Appellate Tribunal (Procedure) Rules, 1982, arise in consequence of certain letters received by the applicants from jurisdictional central excise authorities requiring them to pay the confirmed demands, along with interest thereon, as well as penalties imposed in orders that are currently impugned in appeals before the Tribunal in the absence of indefinite stay of recovery ordered by the Tribunal or to the extent that stay of initial period, since expired, has not been extended beyond the initial limited period.
2. We have heard Learned Counsel for applicants and Learned Authorised Representative at length on their respective submissions.
3. It would appear that this mission for recovery of confirmed dues and penalties was prompted by the decision of the Hon’ble Supreme Court in Asian Resurfacing of Road Agency Pvt Ltd & Anr v. Central Bureau of Investigation (judgement dated 28th March 2018 in criminal appeal no. 1375-1376 of 2013] which, in the view of the said authorities, has rendered all
‘ proceedings, Civil as well as Criminal, stayed by a court of law… vacated automatically at the expiry of 6 months, rom the date of the Supreme Courts aforesaid judgement i.e. 28. 3. 2018 unless the same is extended by a speaking order’
requiring the present applicants to be subject, from 28 September 2018, to recovery proceedings in the absence of a valid and continuing stay order. Learned Counsel informs that, at the time of disposal of stay applications, the Tribunal, though aware of the long lapse of time that may occur till the disposal of the appeals, did not, in all cases, record specifically that the stay would continue till disposal of the appeal. He points out that the recovery proceedings now underway are aimed at such appellants. It is further submitted that Tribunal is likely to be swamped with similar applications in the coming days owing to this misadventure on the part of central excise authorities caused by disregard of the implied bar on recovery in all the orders that disposed off stay applications.
4. It appears to us that, omitting to peruse the observation in the concurring j udgement to the effect that,
’17…. A judgement has to be read as a whole…
the attention of the jurisdictional officers was inexorably drawn to the direction to
’35…. In an attempt to remedy this, situation, we considered appropriate to direct that in all pending cases where stay against proceedings of a civil criminal trial is operating, the same will come to an end on expiry of 6 months from today unless in an exceptional case by a speaking order such stay is extended.’
for initiating steps to implement the said judgement of the Hon’ble Supreme Court.
5. Had the officials concerned applied their mind to the judgement as a whole, instead of selectively culling out certain expressions therein, the present problem and potential chaos could well have been avoided. It is abundantly clear from the narration of the background facts, the observations therein and the catena of decisions of the Hon’ble Supreme Court which have been discussed in detail that the controversy in re Asian Resurfacing of Road Agency Pvt Ltd pertained to delay arising from challenge to the framing of charges under the Prevention of Corruption Act, 1988. This needs no further elaboration in view of the observation that
’17. We have given due considerations to the rival submissions and perused the decisions of this Court. Though the question referred relates to the issue whether order framing charges is an interlocutory order, we have considered further question as to the approach to be adopted by the High Court in dealing with the challenge to the order framing charge. As already noted in para 10, the impugned order also considered the said question. Learned counsel for the parties have also addressed the Court on this question’
6. It is again abundantly clear that the Hon’ble Supreme Court was concerned with the impeding of continuance of trial in the original courts owing to stay granted in applications for intervention by appellate authorities in exercise of revisionary jurisdiction under the Code of Criminal Procedure, 1973 or under the inherent powers vested with the constitutional courts under Article 227 of the Constitution. The lucid articulation that
`26. Thus, even though in dealing with different situations, seemingly conflicting observations may have been made while holding that the order framing charge was interlocutory order and was not liable to be interfered with under Section 397(2) or even under Section 482 Cr.P.C., the principle laid down in Madhu Limaye (supra) still holds the field. Order framing charge may not be held to be purely a interlocutory order and can in a given situation be interfered with under Section 397(2) Cr.P.C. or 482 Cr.P.C. or Article 227 of the Constitution which is a constitutional provision but the power of the High Court to interfere with an order framing charge and to grant stay is to be exercised only in an exceptional situation.
27. We have thus no hesitation in concluding that the High Court has jurisdiction in appropriate case to consider the challenge against an order framing charge and also to grant stay but how such power is to be exercised and when stay ought to be granted needs to be considered further.
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29. It is well accepted that delay in a criminal trial, particularly in the PC Act cases, has deleterious effect on the administration of justice in which the society has a vital interest. Delay in trials affects the faith in Rule of Law and efficacy of the legal system. It affects social welfare and development. Even in civil or tax cases it has been laid down that power to grant stay has to be exercised with restraint. Mere prima facie case is not enough. Party seeking stay must be put to terms and stay should not be incentive to delay. The order granting stay must show application of mind. The power to grant stay is coupled with accountability.
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30. Wherever stay is granted, a speaking order must be passed showing that the case was of exceptional nature and delay on account of stay will not prejudice the interest of speedy trial in a corruption case. Once stay is granted, proceedings should not be adjourned and concluded within two-three months.
31. The wisdom of legislature and the object of final and expeditious disposal of a criminal proceeding cannot be ignored. In exercise of its power the High Court is to balance the freedom of an individual on the one hand and security of the society on the other. Only in case of patent illegality or want of jurisdiction the High Court may exercise its jurisdiction. The acknowledged experience is that where challenge to an order framing charge is entertained, the matter remains pending for long time which defeats the interest of justice. ‘
does not appear to have made an impression in the minds of the officers.
7. The ambit of the decision of the Hon’ble Supreme Court is restricted to one aspect of appeals and, that too, pertaining to trial courts. This Tribunal is not a trial court; it is an authority established to dispose off appeals at the first or second level, as the case may be. The stay ordered by Tribunal is on the recovery of amounts not covered by the pre-deposit determined then; the proceedings before the lower authorities had concluded and the jurisdiction of the Tribunal had been triggered by the filing of the appeals. The facts thus set out are not congruent with the template of the law laid down by Hon’ble Supreme Court in re Asian Resurfacing of Road Agency Pvt implied communications issued by the various officers in the field are not intended to be covered in the said judgement.
8. It is all the more surprising that such steps have been initiated considering that the Hon’ble High Court of Karnataka, in disposing of writ petition no. 100648-100649/2019 dated 10th January 2019, has held that
`From the above it becomes clearer the reference to paragraphs 35 and 36 in the aforesaid Circular is with regard to stay of trial. The same cannot be understood to mean that although the judgement and decree of trial Court impugned the Appellate Court is stayed by the Appellate Court, the said stay of the judgement and decree of the trial Court is only for a period of 6 months and on the expiry of 6 months, the state would automatically stand vacated which would enable the Executing Court to continue with the executing proceedings. Such an understanding of the judgement of the Hon’ble Supreme Court and Circular issued by this Court is not proper.
Though an appeal expected to be a continuation of a suit, it is so for the purpose of applicability of the provisions of the Code of Civil Procedure, 1908. A trial is quite distinct from an appeal, as a trial is an original proceeding, whereas an appeal is on appellate proceeding arising from the judgement and decree passed in original proceeding such as a suit.
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It is necessary to observe that when once a superior Appellate Court has granted stay of the operation of the judgment and decree impugned before it in an appeal, the trial court cannot insist that despite such stay of the operation of the judgment and decree, it would execute the same. In such Cases, the trial Court or any other Court subordinate to the High Court cannot insist that there has to be a further order made by the High Court continuing the stay of such orders on the expiry of six months from the date on which stay order was passed. ‘
9. We cannot put our seal of approval on such action, disregarding the applicability of the directions of the Hon’ble Supreme Court as required to be done in that very judgement, by the officials who have chosen to intervene in matters that are yet pending in the Tribunal and stayed in exercise of its statutory powers. As the said judgement of the Hon’ble Supreme Court is concerned within a specific sphere, we must fall back on the decision of the Larger Bench of this Tribunal in Haldirarn India Pvt Ltd v. Commissioner of Central Excise, Delhi [2014 (309) ELT 81 (Tri-LB)J which holds the field in the matter of stay of operation of order of lower authorities. After examining the amendments effected to section 35C of Central Excise Act, 1944, the power vested in the Tribunal to decide upon continuation of stay of operation of impugned order, in circumstances of the appellant being helpless in the matter of disposal of appeal, is clearly delineated there. Therefore, the proper course of action for the officials was to approach the Tribunal for vacation of the stay. In the absence of such application, we hold that the stay order will continue to operate till the appeals herein are disposed off.
10. At this stage, we are informed by Learned Counsel for the applicants that such notices had been issued to most of the appellants who are before the Tribunal assailing orders pertaining to appeal filed before mandatory pre-deposit was incorporated in Customs Act, 1962 and Central Excise Act, 1944. This, according to us, is a matter of serious concern.
11. Learned Authorized Representative was unable to enlighten us if this was as widespread as is apprehended or if it was in pursuance of instructions from the heads of Commissionerates. If that be so, it would only be appropriate to direct that such instructions be withdrawn with immediate effect. A copy of this order may be served through the office of Commissioner (AR) on the Chief Commissioners/ Principal Chief Commissioners heading zones in the jurisdiction of this bench. Likewise, a copy of this order is to be served through the office of Commissioner (AR) on Chairman, Central Board of Excise & Customs to enable appropriate guidance to the field formations.
