2002 (1) TMI 84 - HC - Central Excise

Summary

Issues:
1. Application for writ of mandamus commanding the Commissioner to decide on stay of recovery of dues.
2. Detention memo dated 29th November, 2001 and quashing the same.
3. Circular issued by the Ministry of Finance regarding recovery of dues during pendency of stay application.
4. Interpretation of Section 35F of the Central Excise Act, 1944.
5. Disposal of stay applications by the Commissioner (Appeals) within a reasonable time.

Analysis:
1. The petitioner sought a writ of mandamus to compel the Commissioner to decide on the stay of recovery of dues and to quash a detention memo dated 29th November, 2001. The petitioner, engaged in the manufacture of sugar and molasses, received consignments without making corresponding entries for Modvat Credit, leading to a penalty. The appeal and stay application were pending, but the recovery proceedings were initiated. The petitioner argued that coercive measures should not be taken until the application for stay is decided, citing a circular from the Ministry of Finance.

2. A circular issued by the Ministry of Finance provided guidelines on recovery of dues during the pendency of stay applications, emphasizing that no coercive measures should be taken until the application is disposed of by the Commissioner (Appeals). The petitioner contended that recovery proceedings should remain stayed until the application is decided. However, the court noted that Section 35F of the Act does not explicitly state that recovery of dues should be stayed during the pendency of the application.

3. The court discussed conflicting views on whether the mere filing of an appeal amounts to a stay of recovery proceedings. It emphasized the importance of the Commissioner (Appeals) deciding on applications within a reasonable time frame. The court referred to previous judgments and circulars to highlight the need for expeditious disposal of stay applications to prevent malpractice and ensure fairness in the process.

4. The court directed the petitioner to file an application for consideration of the pending Section 35F application, with a directive for the Commissioner to pass an order within ten days. Emphasizing the need for timely disposal of such applications, the court provided guidelines for the expeditious handling of stay applications. The writ petition was disposed of with the aforementioned directions to ensure a prompt resolution of the pending issues.