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2013 (4) TMI 250 - HC - Central Excise


Issues Involved:
1. Challenge to Circular No. 967/01/2013-CX dated 1.1.2013.
2. Challenge to recovery notices issued based on the said circular.
3. Pending disposal of stay applications before various appellate authorities.

Detailed Analysis:

1. Challenge to Circular No. 967/01/2013-CX dated 1.1.2013:
The petitioners challenged Circular No. 967/01/2013-CX issued by the Central Board of Excise and Customs, which prescribes parameters for recovery of duty, penalty, etc., pending appeal proceedings. The circular rescinded previous circulars and set new directions for initiating recovery proceedings in various situations, such as when no appeal is filed, or when appeals are filed with or without stay applications.

2. Challenge to Recovery Notices:
The writ petitions also challenged recovery notices issued based on the circular. The petitioners argued that the circular's directions for initiating recovery proceedings within 30 days if no stay is granted or after the disposal of stay petitions were arbitrary and caused undue hardship. The court noted that the circular should be considered directory, not mandatory, and recovery should not be initiated automatically after 30 days if stay/waiver applications are pending.

3. Pending Disposal of Stay Applications:
The petitioners highlighted delays in the disposal of stay applications due to administrative and procedural issues, including vacancies in the appellate authorities and tribunals. The court acknowledged these delays and directed that recovery proceedings should not be initiated if stay/waiver applications are pending and the delay is not attributable to the assessee.

Court's Observations and Directions:

Circular's Validity and Scope:
The court examined the circular in light of previous circulars and instructions issued over the past two decades. It noted that the circular was issued to guide field formations on recovery proceedings but emphasized that it should not override statutory provisions or the rights of the assessees. The circular was deemed persuasive rather than mandatory.

Statutory Provisions:
The court referenced relevant statutory provisions under the Central Excise Act, 1944, and the Customs Act, 1962, which provide for the filing of appeals and stay applications. It highlighted that these provisions aim to balance the interests of the revenue and the assessees, and the circular should not defeat this balance.

Hardship to Assessees:
The court recognized the undue hardship caused to assessees due to delays in disposing of stay applications. It emphasized that recovery proceedings should be initiated only if the delay is attributable to the assessee and not due to administrative or procedural issues.

Directions to Authorities:
The court directed the authorities to refrain from initiating recovery proceedings if stay/waiver applications are pending and the delay is not due to the assessee. It also instructed the appellate authorities to dispose of stay applications expeditiously, preferably within eight weeks.

Monitoring and Transparency:
The court suggested implementing electronic systems to monitor and record proceedings before adjudicating and appellate authorities to ensure transparency and accountability. This would help in timely disposal of stay applications and reduce the hardship faced by assessees.

Conclusion:
The court clarified that while the circular provides guidance for recovery proceedings, it should not be used to automatically initiate recovery without considering the pendency of stay applications. The authorities were directed to ensure timely disposal of stay applications and to refrain from coercive recovery actions if delays are not attributable to the assessees. The writ petitions were disposed of with these directions, and no costs were awarded.

 

 

 

 

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