2015 (2) TMI 195 - AT - Central Excise

Recovery of dues - Freezing of accounts - the appellant has complied with the mandatory requirement of depositing of 7.5% of the total duty liability - Held that - In our considered view and as also statutorily once mandatory deposit of 7.5% has been made, there is no reason for recovery of any further amount from the appellant and the action of the Dy. Director, DGCEI seems to be beyond the scope of law. In our view, there is no need to freeze the account of the appellant as long as the appeal is pending before this Bench. Accordingly, we direct the lower authorities, specially the Dy. Director, DGCEI, Goa to defreeze the account forthwith by issuing appropriate instructions to the appellant s bankers. - Decided in favour of appellant.

Issues Involved: Urgent consideration of plea regarding compliance with section 35F of Central Excise Act, 1944; Freezing of appellant's bank accounts by Deputy Director, DGCEI; Compliance with mandatory deposit of 7.5% of total duty liability; Scope of recovery during pendency of appeal.

Comprehensive Analysis:

1. Urgent Consideration of Compliance with Section 35F of Central Excise Act, 1944:
The appellant had complied with the provisions of section 35F of the Central Excise Act, 1944 while filing an appeal against the order-in-original dated 28.11.2014. Despite this compliance, the Deputy Director, DGCEI, Goa wrote to the appellant's bankers to remit the amounts in the appellant's account to credit the same to the Government exchequer against the dues. The Tribunal directed the authorities not to take any coercive action and found that freezing the appellant's accounts was unnecessary as long as the appeal was pending. The Tribunal emphasized the importance of compliance with statutory requirements and directed the defreezing of the appellant's accounts.

2. Freezing of Appellant's Bank Accounts by Deputy Director, DGCEI:
The Deputy Director, DGCEI's action of freezing the appellant's accounts, despite the appellant complying with the mandatory deposit of 7.5% of the total duty liability, was deemed to be beyond the scope of the law by the Tribunal. The Tribunal held that once the mandatory deposit was made, there was no justification for further recovery from the appellant. The Tribunal directed the lower authorities, specifically the Deputy Director, DGCEI, Goa, to defreeze the appellant's accounts immediately by issuing appropriate instructions to the appellant's bankers, emphasizing the need to adhere to legal procedures and not take actions beyond the statutory framework.

3. Compliance with Mandatory Deposit of 7.5% of Total Duty Liability:
The appellant had complied with the mandatory requirement of depositing 7.5% of the total duty liability while filing the appeal before the Tribunal. The Tribunal noted this compliance and emphasized that once this deposit was made, there should be no further recovery from the appellant. The Tribunal's decision highlighted the significance of fulfilling statutory obligations and ensuring that the appellant's rights were protected during the appeal process.

4. Scope of Recovery During Pendency of Appeal:
During the pendency of the appeal before the Tribunal, the Deputy Director, DGCEI's actions in freezing the appellant's accounts were found to be unjustified and beyond the legal framework. The Tribunal clarified that there was no need to freeze the appellant's accounts as long as the appeal was pending before the Tribunal. By directing the defreezing of the accounts, the Tribunal reaffirmed the principle of due process and the importance of adhering to legal procedures, especially when it comes to financial matters and recovery actions during the appeal process.

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