2008 (5) TMI 59 - AT - Central Excise

Range officer proceeded against assessee to recover demand and penalty even after tribunal s final order setting aside the Commissioner s order sustaining the demand raised by original authority - Tribunal s final order setting aside the Commissioner s order & requiring the lower appellate authority to pass fresh order had the effect of setting aside the demand itself and has the effect of stay of recovery till final disposal of the assessee s appeal action of range officer is not justified

Summary

Issues Involved:
- Recovery of confirmed duty and penalty without stay order
- Effect of Tribunal's final order on demand of duty and penalty

Analysis:
1. Recovery of confirmed duty and penalty without stay order:
The case involved an application by the proprietor of Control Systems seeking relief against a demand of duty and penalty raised by the Range Officer. The Range Officer had issued a letter to the assessee demanding payment of confirmed duty and penalty within a week's time, threatening action under Section 142 of the Customs Act, 1962 if not paid. However, the Tribunal's final order setting aside the appellate Commissioner's decision to sustain the demand had the effect of setting aside the demand itself. The Range Officer's action in seeking recovery without considering the Tribunal's final order was deemed incorrect by the Member (J). It was clarified that in the absence of a stay order, the demand of duty and penalty cannot be recovered from the party, as the final order of the Tribunal acts as a stay of recovery until the appellate Commissioner disposes of the appeal afresh.

2. Effect of Tribunal's final order on demand of duty and penalty:
The Member (J) emphasized that the final order of the Tribunal had the effect of setting aside the demand of duty and penalty, requiring the lower appellate authority to pass a fresh order. The Superintendent of Central Excise's proceedings demanding payment from the party were set aside under Rule 41 of the CESTAT (Procedure) Rules. It was concluded that the Range Officer had misunderstood the implications of the Tribunal's final order and that the application seeking relief against the demand was allowed.

In summary, the judgment clarified the legal position regarding the recovery of confirmed duty and penalty in the absence of a stay order, emphasizing the impact of the Tribunal's final order on such demands and the need for proper understanding and compliance with the legal procedures outlined in the CESTAT (Procedure) Rules.