`Tribunal Has Inherent Authority To Stay Orders Detrimental To Revenue: CESTAT

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that tribunal has inherent authority to stay orders detrimental to revenue. P. Dinesha (Judicial Member) and M. Ajit Kumar (Technical Member) stated that “the power of taxation including its collection being an inherent attribute of sovereignty, the right of revenue to seek a stay of an order determinantal to the collection of taxes, cannot be lightly dismissed….……..we find force in the plea made by the revenue that Rule 41 of the CESTAT (Procedure) Rules, 1982 also contains the power for grant of a stay against an order or its part. In any case such a power is inherent in the powers of the Tribunal.” In this case, the assessee/respondent exported mango/guava pulp and claimed a higher RoDTEP incentive (2.5%) by allegedly misclassifying their products under CTH 0804 5040 / 0804 5090. The Adjudicating Authority held that, due to sterilization, the correct classification of the impugned goods would be under CTH 2008 9994/9999 as 'other fruit pulp', allowing only a 1.4% benefit. However, the Commissioner (Appeals) after examining the issue classified the goods under CTH 0804 5040 and ruled in favour of the respondents. The revenue has requested a stay of the impugned order citing a strong chance of the department succeeding in the appeal. The revenue argued that the processed export goods do not meet the criteria listed in the HSN Explanatory Notes to Chapter 08, so Mango Pulp should be correctly classified under Customs Tariff Item 2008 9999, and Guava/Fruit Pulp under 2008 9994. The assessee contended that the Tribunal lacks statutory authority under the Customs Act, 1962 to grant stay orders, as there is no explicit provision enabling this power. The Tribunal observed that the stay application does not disclose whether the said amounts already stand collected and would have to be refunded as a result of the impugned order. The bench stated that a stay would in any case not help in the collection of pending tax or fine or penalty consequent to the impugned order and which purpose may have been better served through a prayer for an 'early hearing'. The Tribunal stated that “hence merely stating the probability of revenue succeeding in their appeal, is a bald statement which cannot be stated to be a reasonable plea and is just not enough. Every appellant is bound to have such a conviction on the probability of his success in the appeal proceedings. The proof of there being 'sufficient cause' is a condition precedent to the exercise of discretionary jurisdiction by this Tribunal on a stay application and it is lacking in these applications. Some more homework needs to be done by revenue if such applications are to succeed and are not seen to be filed as a mere formality. Hence on balance it is felt that revenue has not made out a case for stay of the impugned order.” In view of the above, the Tribunal dismissed the stay application. Case Title: Commissioner of Customs v. M/s. SKOT India Case Number: Customs Appeal No. 40893/2024 Counsel for Appellant/ Department: Anandalakshmi Ganeshram Counsel for Respondent/ Assessee: Hari Radhakrishnan Click Here To Read/Download The Order

`Tribunal Has Inherent Authority To Stay Orders Detrimental To Revenue: CESTAT

Mehak Dhiman

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