2014 (3) TMI 1066 - HC - Central Excise

Recovery notices - attaching the bank accounts - Held that - Apart from the fact that the petitioner-company was not put on notice by the Revenue prior to the attachment of its bank accounts under the individual recovery notices dated 5-3-2014 addressed to the banks, the said action is directly in the teeth of the direction of this Court in Writ Petition 2013 (3) TMI 717 - ANDHRA PRADESH HIGH COURT whereby, the Revenue was restrained from initiating coercive steps for recovery of the amounts due under the order-in-original dated 28-6-2011 till the disposal of the stay application by the CESTAT, Bangalore. It is not in dispute that the stay application is still pending disposal. Therefore, notwithstanding the liberty given by the CESTAT under its order dated 18-12-2013, the Revenue could not have resorted to any coercive steps without first seeking the leave of this Court by way of modification of the order passed in 2013 (3) TMI 717 - ANDHRA PRADESH HIGH COURT . The impugned recovery notices dated 5-3-2014 are thus wholly unsustainable and are accordingly set aside. The petitioner-company shall proceed with the hearing of the stay application on 27-3-2014 before the CESTAT without seeking further adjournment.

Summary

Issues:
Challenge to recovery notices issued by Assistant Commissioner of Customs, Excise & Service Tax attaching bank accounts of petitioner-company.

Analysis:
The judgment revolves around the challenge to recovery notices issued by the Assistant Commissioner of Customs, Excise & Service Tax, attaching the bank accounts of the petitioner-company. The petitioner had previously approached the Court through a writ petition related to an order-in-original subject to appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). A Division Bench of the Court had directed the respondents not to take coercive steps for recovery until the stay application was decided by CESTAT. Despite this, the Revenue proceeded with attaching the bank accounts without prior notice to the petitioner. The Court found this action to be in direct violation of its earlier direction and deemed the recovery notices unsustainable.

The Court noted that the stay application was still pending before CESTAT, and the Revenue should have sought permission from the Court before taking coercive steps. The liberty granted by CESTAT did not override the Court's directive in the writ petition. As a result, the recovery notices dated 5-3-2014 were set aside as being unjustifiable. The judgment emphasized that the petitioner should proceed with the stay application hearing before CESTAT without seeking further adjournment.

Ultimately, the writ petition was allowed, and any pending miscellaneous petitions were closed without any order as to costs. The judgment highlights the importance of adhering to court directives and seeking appropriate permissions before taking coercive recovery actions, especially when related matters are pending before higher tribunals.