2017 (12) TMI 900 - HC - Central Excise

Coercive Recovery of penalty - petitioner vehemently contended that the appeal of the petitioner is still pending before the Tribunal. Stay has not been vacated. Recovery pending appeal, therefore, initiated by the Department is improper and impermissible - Held that - The company had to deposit ₹ 2 crores within the stipulated time. When the company failed to deposit such amount, there would be no stay in favour of the company or appellants. The petitioner, having enjoyed the benefit of the order, cannot argue that even if the company failed to deposit the amount, other appellants should continue to enjoy benefits of the stay - petitioner, having enjoyed the benefit of the order, cannot take a contradictory stand. If the petitioner was aggrieved by the formula provided by the Tribunal in the said order, the petitioner should have challenged the same - petition dismissed - decvided against petitioner.

Summary

Issues:
Challenging communications for coercive recovery of unpaid penalty dues | Tribunal's order for pre-deposit and stay pending appeals | Validity of recovery proceedings initiated against the petitioner | Interpretation of Tribunal's order and its impact on the petitioner's appeal

Analysis:
The petitioner challenged communications seeking coercive recovery of unpaid penalty dues based on orders by the Assistant Commissioner of Central Excise. The Tribunal's order required the company to deposit a sum within a specified time for pre-deposit, which would result in the waiver of the balance amount of duty and penalty, staying recovery pending appeals for all appellants. The company's failure to deposit led to dismissal of its appeal, prompting the Department to initiate recovery proceedings against the petitioner.

The petitioner argued that since their appeal was pending before the Tribunal and stay had not been vacated, recovery proceedings were improper. Citing a judgment of the Punjab & Haryana High Court, the petitioner contended that recovery during appeal was impermissible. However, the Department maintained that the company's failure to meet the pre-deposit condition allowed for the recovery of outstanding dues.

The Court noted that the Tribunal's order granted conditional stay to all appellants, including the company and the petitioner, subject to the company's deposit of a specified amount. As the company failed to comply, the stay was lifted for all appellants. The Court emphasized that the petitioner had benefited from the order and could not now seek immunity from recovery based on the company's non-compliance. Criticizing the Tribunal's order after enjoying its benefits was deemed impermissible. The Court distinguished the cited judgment from the Punjab & Haryana High Court, stating it addressed a different legal context regarding automatic vacation of stay after a specified period.

Ultimately, the Court dismissed the petition, upholding the Department's right to recover outstanding dues based on the Tribunal's order and the petitioner's failure to challenge the composite order or seek separate consideration for interim protection.