2013 (8) TMI 227 - HC - Central Excise

Stay when there is no sitting due to administrative exigencies - Circular No. 925/15/2010-CX., dated 26-5-2010 adjustment of rebate with demand - Held that - Appellant could not be found fault with, since there is no sitting due to administrative exigencies Reliance placed on the Circular No. 925/15/2010-CX., dated 26-5-2010 issued by the Central Board of Excise & Customs, which states that no coercive proceedings should be initiated if there is no fault on the part of the assessee, and also the decision of the Apex Court in the case of Commissioner of Customs & Central Excise, Ahmedabad v. Kumar Cotton Mills Pvt. Ltd., 2005 (1) TMI 114 - SUPREME COURT OF INDIA Moreover, appellant claimed rebate and the Revenue also accepted the case of the appellant - No proper opportunity has been given to the appellant - Revenue had granted stay earlier after taking into consideration that the appellant had already deposited a sum of Rs. 43,00,000/- in the year 1991. Taking into consideration these facts, it is held that the respondent has acted hastily and adjusted the amount without affording proper opportunity to the appellant. Under the circumstances, there is clear violation of the principles of natural justice - Direction to the respondent to take up the matter, consider the case of the appellant and after giving opportunity to the appellant, decide the matter in accordance with law as expeditiously as possible, preferably within a period of four weeks from the date of receipt of a copy of this order - Setting aside the above said impugned orders of the respondent only in respect of adjustment of rebate amount, and in all other aspects, the orders passed by the respondent shall remain unaltered Decided in favor of Assessee.

Summary

Issues Involved:
1. Adjustment of rebate against demand without proper opportunity.
2. Expiry of stay orders due to administrative reasons.
3. Applicability of Circular No. 925/15/2010-CX.
4. Violation of principles of natural justice.

Issue-wise Detailed Analysis:

1. Adjustment of Rebate Against Demand Without Proper Opportunity:
The appellant, engaged in the manufacture of various yarns, faced a demand of Rs. 1,12,87,214.26 from the Assistant Commissioner of Central Excise, Madurai. The appellant's appeals to the Commissioner (Appeals) and CESTAT were dismissed, and subsequent stay petitions were filed. The CESTAT granted waivers and stays, but these expired due to statutory limits and administrative delays. The Superintendent of Central Excise issued a letter demanding payment or stay extension, which the appellant could not comply with due to CESTAT's non-sitting. The respondent adjusted the rebate amount against the demand without giving proper opportunity to the appellant, violating principles of natural justice.

2. Expiry of Stay Orders Due to Administrative Reasons:
The CESTAT initially granted stays which expired after six months. The appellant's petitions for further extensions were pending due to the non-availability of CESTAT members. The respondent demanded compliance within 10 days of the stay's expiry, but the appellant received this notice late and could not act in time. The court noted that the appellant could not be faulted for the administrative delays in CESTAT's functioning.

3. Applicability of Circular No. 925/15/2010-CX:
The appellant relied on Circular No. 925/15/2010-CX, which states that no coercive action should be taken if the assessee is not at fault and that the Tribunal can extend stays beyond six months. The court emphasized that this Circular, binding on the Revenue, was not considered by the respondent when adjusting the rebate. The Circular and the Supreme Court's judgment in Commissioner of Customs & Central Excise, Ahmedabad v. Kumar Cotton Mills Pvt. Ltd. supported the appellant's case.

4. Violation of Principles of Natural Justice:
The court found that the respondent acted hastily and without providing the appellant sufficient time to seek further stay extensions. The adjustment of the rebate amount without a proper hearing violated principles of natural justice. The learned single Judge's order was set aside for not considering these relevant factors.

Conclusion:
The court set aside the impugned orders related to the adjustment of the rebate amount and directed the respondent to reconsider the appellant's case, providing a proper opportunity for a hearing. The rest of the respondent's orders remained unaltered. The writ appeals were disposed of accordingly, with no costs.