2013 (12) TMI 572 - AT - Central Excise

Suits pending from long time Held that Interim stay granted after a brief hearing - procedure laid down in Chapter XII of the Judicial Manual followed -Substantial time has been spent in identifying deserving cases & grant of relief of interim stay - this benefits neither the assessee nor the Revenue - Assessees continue to get notices and approach the Tribunal and officers continue to issue notices generating a lot of additional work for the Registry and the Bench adding thereby to the already grim pendency situation - If the time spent on such matters could be used to hear the listed stay applications, the Revenue can legitimately expect to gain from pre-deposit orders passed in cases where the assessees fail to make out prima facie case during such time. The circular and actions in pursuance thereof have mostly spoiled these chances of the Revenue - The cases falling within the exceptions, the field formations coming within the jurisdiction of the Tribunal shall not resort to any action as proposed in the Board s Circular - where the Commissioner of Central Excise/Customs/Service Tax thinks that the assessee does not have a prima facie case & pre-deposit is to be ordered and where the Duty/Service Tax/CENVAT credit demanded is more than Rs. 1 crore, it will be open to the Commissioner concerned to file an application for out-of-turn hearing of the stay application filed by the assessee, certifying both the aspects - Such applications shall be listed to be considered within 30 days of filing.

Summary

Issues:
- Circular issued by C.B.E. & C. directing recovery of confirmed demands without stay orders
- Increase in appeals and stay applications due to service tax levy and industrial activity
- Delay in disposal of stay applications leading to coercive actions by officers
- Granting of ad interim stay by the Bench after brief hearings
- Proposal for general order to prevent coercive actions during pendency of stay applications
- Exceptions listed for cases where coercive actions can be taken
- Direction to field formations not to resort to coercive actions unless exceptions apply
- Necessity of the order to prevent abuse of the Tribunal's process
- Procedural modifications for cases with demands exceeding Rs. 1 crore
- Circulation and compliance instructions to Chief Commissioners

Analysis:

The judgment addresses the Circular issued by the C.B.E. & C. on 1-1-2013, directing officers to recover confirmed demands without stay orders. The increase in appeals and stay applications due to the expansion of service tax levy and industrial activity has led to a backlog of cases, with a significant number pending before the Bench. This backlog has resulted in delays in disposing of stay applications, forcing officers to resort to coercive actions such as detaining goods, attaching assets, or freezing bank accounts during the pendency of applications.

To alleviate the situation, the Bench has been granting ad interim stay in deserving cases after brief hearings, following the procedure outlined in the Judicial Manual. However, the continuous influx of such cases has not abated, leading to inefficiencies for both the assessees and the Revenue. The judgment emphasizes the need for a general order to prevent coercive actions by the Department during the pendency of stay applications, outlining specific exceptions where such actions may be warranted.

The exceptions listed include cases where duty or service tax has been collected but not paid, cases of admitted duty liability yet to be discharged, instances where the entire liability has been deposited, and situations where appeals have been rejected due to time limitations. The judgment directs field formations not to take coercive actions unless the exceptions apply, aiming to prevent abuse of the Tribunal's process and uphold the principles of justice as per the CESTAT (Procedure) Rules, 1982.

Furthermore, procedural modifications are proposed for cases with demands exceeding Rs. 1 crore, allowing Commissioners to file applications for out-of-turn hearings certifying lack of prima facie case and the need for pre-deposit. These applications are to be considered within 30 days of filing. The judgment concludes by instructing Chief Commissioners to circulate and comply with the order promptly, with a deadline set for discontinuing the existing procedure of mentioning matters beyond a specified date.