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2013 (1) TMI 4 - AT - Central ExciseRebate claim Adjustment of refund against demand Whether it is open to revenue, to adjust the demand against refund due to assessee even when stay has been granted by Tribunal or stay application is pending before Tribunal against such demand Held that - Following the decision in case of GALAXY INDO FAB. LIMITED (2010 (3) TMI 235 - ALLAHABAD HIGH COURT) that recovery/demand notice during pendency of stay cannot be undertaken by the Revenue authorities especially when the stay was not challenged and the said stay order was binding on the revenue authorities. When a stay application is pending before the Tribunal, no coercive steps should be taken to recover the demands. It was highly inappropriate on the part of the revenue authorities to enforce recovery when the stay had been granted by this Tribunal. The refusal by revenue authorities to pay respect to the order of the Tribunal is violation of judicial discipline. In favour of assessee
Issues Involved:
1. Appropriation of rebate claims by the revenue authorities against confirmed demands. 2. Enforcement of recovery when stay orders were in place. 3. Contempt of tribunal orders by the revenue authorities. 4. Judicial discipline in handling stay applications and recovery actions. Analysis: Issue 1: Appropriation of rebate claims against confirmed demands The appellant had filed rebate claims totaling Rs. 42,34,172/-, out of which the Deputy Commissioner sanctioned the claims but appropriated Rs. 38,63,600/- towards confirmed demands pending against the appellants. The appellant argued that they had obtained stays for the demands from the Tribunal, and the appropriation was in disregard of the Tribunal's orders. The Lower Appellate Authority rejected the appeal, leading to the appellant approaching the CESTAT Mumbai. Issue 2: Enforcement of recovery when stay orders were in place The Ld. Advocate for the appellant argued that the entire demand of Rs. 24.36 lakhs was stayed by the Tribunal, and the stay was granted during the pendency of the appeals. Similarly, the stay application against the demand of Rs. 14.27 lakhs was pending before the Tribunal. The Tribunal found that the revenue authorities inappropriately enforced recovery despite the stays granted by the Tribunal, showing contempt for the Tribunal's orders. Issue 3: Contempt of tribunal orders by revenue authorities The Tribunal noted that the Assistant Commissioner had disregarded the Tribunal's stay orders and enforced recovery, which was a violation of judicial discipline. Referring to judicial pronouncements, the Tribunal highlighted that coercive steps should not be taken to recover demands when stay applications are pending before the Tribunal. The Tribunal cited the judgment of the Hon'ble Allahabad High Court imposing exemplary costs on an Assistant Commissioner for not respecting the Tribunal's stay order. Issue 4: Judicial discipline in handling stay applications and recovery actions The Tribunal emphasized the importance of respecting Tribunal orders and maintaining judicial discipline. It directed the jurisdictional Assistant/Deputy Commissioner to refund the recovery made from the appellant and forwarded the order to the Chairman, Central Board of Excise & Customs, for appropriate action. The appeals were allowed with consequential relief, emphasizing the need for revenue authorities to adhere to Tribunal orders and exercise caution in recovery actions during the pendency of stay applications.
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