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2013 (4) TMI 250 - HC - Central ExciseRecovery proceedings - Circular No.967/01/2013-CX, dated 1.1.2013 - Correct time limit for initiating recovery proceedings - Held that - The Court after considering the various circulars issued from time to time and the present circular/instruction, which is more in the nature of a guidance to the department authorities insofar as the recovery is concerned, is of the firm opinion that the said circular/instruction should not be taken as a mandate to initiate recovery proceedings automatically after expiry of the period specified - The circular/instruction is accordingly clarified to state that while there is a power to initiate recovery proceedings on an erring assessee, the department should refrain from taking coercive steps if due diligence is shown by the assessee in prosecuting the appeal and the stay/waiver application. In all these cases, it is shown that appeals are pending before the Tribunal, it has been functioning without full complement of members and, therefore, the petitioners were not able to list their cases on board and seek interim orders. The situation is beyond the control of the writ petitioners/assessees and they were not responsible for the delay in prosecuting the matter.Insofar as the Commissioner (Appeals) is concerned, it is to be noticed and it is fairly conceded by the learned Standing Counsel for the respondents that large number of appeals and stay petitions are pending and dates have been given. Therefore, the petitioners are not at fault - In no case there is a breach alleged on the part of the petitioners herein -The time limit specified in the circular/instruction insofar as it relates to appeals filed along with stay/waiver application is concerned should be interpreted in such a manner that it should not cause hardship to the genuine assessee In such situation, the Court has no hesitation to hold that the respondent/department should refrain from proceeding further in the recovery proceedings pending disposal of the stay/waiver application before the Commissioner (Appeals) or the Tribunal, as the case may be - However, with a rider that each one of the petitioners shall inform the respondent/department the stage of the pending applications for stay/waiver from time to time, preferably every month, if there is an inordinate delay. The authorities are directed to take up the waiver/stay applications at an early date and dispose of the same preferably within eight weeks from the date of receipt of a copy of this order, if not already disposed of. Till the disposal of the stay/waiver applications as indicated above, the respondent/department shall not take coercive steps for recovery - All these writ petitions are disposed of in the above terms - No costs - Consequently, the connected miscellaneous petitions are closed.
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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