2018 (3) TMI 104 - HC - Central Excise

Recovery proceedings through garnishee proceedings - Rule 8(3A) of the Central Excise Rules, 2002 - Held that - this Court is of the opinion that the petitioner- Company, ought to have kept the lis alive by filing the regular appeal before the Tribunal u/s.35 B of the Central Excise Act, 1944 against the impugned order passed by the first appellate authority namely, learned Commissioner of Central Excise (Appeals), Mysore - Petition disposed off.

Summary

Issues:
Challenge to impugned recovery proceedings through garnishee proceedings without challenging the order by the first appellate Court, validity of garnishee proceedings seeking recovery under Central Excise Act and CGST Act, applicability of Rule 8(3A) of Central Excise Rules, 2002, delay in filing appeal before Tribunal, enforceability of demand despite Gujarat High Court judgment, direction to file regular appeal before Tribunal.

Analysis:
The petitioner-Company challenged the recovery proceedings through garnishee proceedings without contesting the order by the first appellate Court, the Commissioner of Central Excise (Appeals). The impugned garnishee proceedings aimed to recover ?59,95,387 from Axis Bank Limited under the Central Excise Act and CGST Act. The petitioner argued that since Rule 8(3A) of Central Excise Rules, 2002 was struck down by the Gujarat High Court, the demand could not be enforced. However, the Respondents contended that the appeal before the Tribunal was time-barred, and the belief that Rule 8(3A) was inoperative was baseless due to the stay by the Supreme Court on the Gujarat High Court judgment.

The Court held that the petitioner should have filed a regular appeal before the Tribunal against the order by the first appellate authority. The argument that the demand was invalid due to the Gujarat High Court decision was deemed fallacious. As long as the order by the Commissioner of Excise (Appeals) was valid, the demand was enforceable. The Court directed the petitioner to file a regular appeal before the Tribunal within four weeks, allowing the appeal without raising the objection of limitation, subject to meeting other conditions for maintaining the appeal.

In conclusion, the Court disposed of the writ petition with the direction for the petitioner to file a regular appeal before the Tribunal. The judgment emphasized the importance of challenging orders through proper legal channels and upheld the enforceability of the demand despite the Gujarat High Court decision.