2013 (4) TMI 97 - HC - Service Tax

Recovery service tax - attaching the bank account - circular dated 1 January 2013 of the CBEC - Held that - The law laid by the Court on the interpretation of the circular of the Central Board of Central Excise and Customs would bind all authorities who are subject to the jurisdiction of this Court. There was absolutely no reason or justification on the part of the appellate authority to keep the stay application pending and take recourse to coercive remedies under the law. Since the amount has now been withdrawn, we decline to accede to the request of the advocate of the Petitioner in the facts of this case that the Revenue should be directed to bring back the amount. Instead, consider it appropriate having regard to the ends of justice to direct that the appeal which has been filed by the Petitioner, shall be disposed of expeditiously by the Commissioner of Central Excise(Appeals) within a period of four weeks of the date on which an authenticated copy of this order is produced on the record. We,however, direct that henceforth the controlling authority shall issue a circular to all the authorities within his jurisdiction that the directions contained in the judgment of this Court in Larsen and Toubro Limited(2013 (2) TMI 188 - BOMBAY HIGH COURT) shall be duly observed.

Summary

Issues:
1. Recovery of service tax and penalty amount despite pending appeal and stay application.
2. Interpretation of circular dated 1 January 2013 of the Central Board of Central Excise and Customs.
3. Justification for keeping the stay application pending.
4. Directions for expeditious disposal of the appeal by the Commissioner of Central Excise (Appeals).
5. Issuance of a circular to ensure compliance with the court's judgment.

Analysis:

1. The petitioner raised concerns regarding the recovery of the entire service tax and penalty amount by attaching the bank account despite having filed an appeal before the Commissioner of Central Excise (Appeals) and a pending stay application. This action was taken based on a circular dated 1 January 2013. The court noted that coercive remedies should not have been pursued when the stay application was pending, especially without valid reasons.

2. The court referred to a previous judgment in Larsen and Toubro Limited vs. Union of India, where it was held that recovery proceedings cannot be initiated if an application for stay is pending due to reasons beyond the control of the assessee. However, if the application remains pending for an unreasonable period due to default or improper conduct, recovery proceedings can be initiated. The court emphasized that the interpretation of the circular binds all authorities under its jurisdiction.

3. The court found no justification for the appellate authority to keep the stay application pending and resort to coercive measures. Despite the withdrawal of the amount, the court declined the advocate's request to direct the Revenue to return the amount. Instead, the court ordered the expeditious disposal of the appeal within four weeks of the order's authentication. Additionally, the controlling authority was directed to issue a circular ensuring compliance with the court's directions.

4. Consequently, the petition was disposed of with no order as to costs, emphasizing the importance of adhering to the court's judgment in similar cases to prevent unnecessary delays and undue hardship on the assessee.