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2013 (10) TMI 1045 - HC - Central ExciseCoercion While Initiation of Recovery Proceedings Validity of Circular dated 1-1-2013 Held that - Relying upon LARSEN & TOUBRO LTD & OTHERS V/s UNION OF INDIA AND OTHERS 2013 (2) TMI 188 - BOMBAY HIGH COURT - If the remedy of appeal has been provided to the assessee with the application of interim relief in the form of stay application either u/s. 35F of the Central Excise Act or relevant provisions of the cognate Act, if any, and the appellate authorities if failed to decide the stay application only after affording opportunity of hearing to the parties - recovery proceedings could not be permitted to be initiated by adopting coercive methods by the Department under the guise of Circular dated 1-1-2013 - it is high time where the respondents are expected to adopt the procedure so that the grievance of such of the assessee is redressed and coercive methods could be deferred - The appellate authorities/CESTAT directed to hear and decide the stay application filed along with the appeal as early as possible and till then the Department should be restrained from adopting any coercive method for recovery in pursuant to the order from the assessee petitioners Decided in favour of Petitioner.
Issues involved:
Challenging Circular dated 1-1-2013 of Central Board of Excise and Customs regarding recovery proceedings against confirm demand during pending appeals. Detailed Analysis: Issue 1: Validity of Circular dated 1-1-2013 The petitions under Art. 226 challenge the Circular dated 1-1-2013 by the Central Board of Excise and Customs, which directed recovery proceedings against confirm demand during pending appeals before appellate authorities. The petitioners argue that coercive methods should not be allowed when stay applications are pending without any fault on their part, as it penalizes them for situations beyond their control, violating Art. 14 of the Constitution. Issue 2: Examination by High Court of Bombay The High Court of Bombay previously examined the Circular dated 1-1-2013 and held that recovery proceedings cannot be initiated if an application for stay is pending for a reasonable period due to reasons not attributable to the assessee's conduct. The Court directed that no coercive steps for recovery should be taken until the stay application is disposed of, emphasizing the importance of expeditious disposal of such applications. Issue 3: Coercive Recovery Measures The petitioners in the present case have filed appeals along with stay applications pending before appellate authorities/CESTAT. Despite the pending applications, the Department issued recovery notices after the stipulated period mentioned in the Circular dated 11-1-2013. The petitioners argue that coercive recovery measures should be halted until their applications are heard and decided to ensure fair treatment and adherence to natural justice principles. Issue 4: Court's Observations and Directions The Court concurs with the submissions made and finds that coercive recovery methods during the pendency of stay applications harm the assessee and go against the principles of natural justice. It directs the appellate authorities/CESTAT to hear and decide stay applications promptly, restraining the Department from coercive actions until then. The Court emphasizes the importance of redressing grievances of the assessee and avoiding undue delays in decision-making processes. Conclusion: The petitions are disposed of with directions for the prompt hearing and decision on stay applications by the appellate authorities/CESTAT, preferably within eight weeks. Coercive recovery measures are prohibited until the applications are resolved. The petitioners are instructed to appear before the relevant appellate authority/CESTAT for further proceedings.
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