2004 (8) TMI 446 - AT - Central Excise

Summary

Issues: Extension of stay of recovery, Violation of principles of natural justice in attachment proceedings

Extension of Stay of Recovery:
The case involved a situation where the department was proceeding to recover dues by attachment proceedings under Section 11 of the Central Excise Act, 1944, despite the appellant having deposited Rs. 50,000 under Section 35F. The Tribunal had previously allowed waiver of pre-deposit and stay of recovery subject to the condition of the initial deposit. The appellant requested an extension of the stay of recovery until the final disposal of the appeal. The Tribunal considered the circumstances, noting that the attachment order included items prima facie immune to attachment and was issued without allowing the party to show cause against the attachment, thus violating the principles of natural justice. Citing the IPCL v. CCE decision, the Tribunal granted the extension of stay of recovery to prevent injustice and ensure the ends of justice were served.

Violation of Principles of Natural Justice in Attachment Proceedings:
The Tribunal found that the attachment proceedings carried out by the Assistant Commissioner under Section 11 of the Central Excise Act, 1944 were in violation of the principles of natural justice. The order of attachment included not only the appellant's finished products but also other items that should not have been subject to attachment without proper cause being shown. The Tribunal emphasized that the Assistant Commissioner's actions were likely to defeat the ends of justice and did not align with the principles of natural justice. As a result, the Tribunal extended the stay of recovery to rectify the procedural irregularities and ensure that justice was upheld throughout the appeal process.