Arihant Spinning Mills vs Union of India

Rajive Bhalla, J.

The petitioner is before us in a writ, praying that a writ be issued quashing letter/order dated 29-4-2014 (Annexure P-6) passed by the Superintendent of Central Excise, Malerkotla demanding duty, penalty and interest. Counsel for the petitioner submits that admittedly an appeal, filed by the petitioner, is pending adjudication. The Tribunal had granted a stay and even extended the stay order, but the respondents have by relying upon proviso to Section 35C(2A) of the Central Excise Act, 1944 (hereinafter referred to as "the Act") served a demand notice upon the petitioner inferring that the Tribunal cannot grant stay beyond 360 days, in its entirety.

Counsel for the petitioner further submits that the proviso to Section 35C(2A) of the Act is directory. The proviso be read down as conferring power upon the Tribunal to extend stay beyond 360 days.

Reply filed on behalf of respondents in Court today, is taken on record.

Counsel for the respondent submits that as proviso to Section 35C(2A) of the Act is mandatory, it can neither be read down nor can the power of the Revenue to effect recovery be curtailed in any manner much less by interpretation. The stay order has ceased to operate thereby conferring a right to recover duty, penalty and interest. We have heard counsel for the parties and are of the opinion that traversing the controversy raised namely the nature of proviso to Section 35C (2A) of the Act is academic as admittedly an appeal is pending before the Tribunal. The writ petition is, therefore, disposed of by directing the Tribunal to decide the appeal within three months the parties putting in appearance on 14-1-2015. Order dated 29-4-2014 shall remain in force for a period of three months from 14-1-2015.