2005 (10) TMI 102 - HC - Central Excise

Summary

Issues involved: Stay order vacated due to delay in disposing of appeal, enforcement of recovery of outstanding dues, protection against coercive recovery, extension application for stay order, encashment of cheques, direction for early hearing of extension application, timeline for presenting order copy to prevent encashment, prohibition on coercive recovery for eight weeks.

Analysis:

The petitioners preferred appeals before the Customs, Excise & Service Tax Appellate Tribunal, seeking a stay of demand. The Tribunal directed the petitioners to make a pre-deposit of Rs. 20 lakhs, which they complied with, thereby staying further pre-deposit and recovery of additional amounts. However, a communication from the respondent authority requested immediate payment of the pending amount, leading the petitioners to realize that the stay order might have been vacated. The petitioners moved an application for extension of the stay to protect against coercive recovery until the Tribunal decides on the extension application.

The respondent authority argued that, as the Tribunal had not disposed of the appeal within 180 days, the stay order stood vacated, allowing for the enforcement of recovery of outstanding dues. The petitioners invoked equitable jurisdiction but failed to demonstrate entitlement to equity in the case. The petitioners cited previous court decisions where extension applications had been filed belatedly to support their claim for protection against coercive recovery.

The respondent authority collected four cheques totaling Rs. 20 lakhs from the petitioners on specific dates. The court directed the petitioners to seek early hearing of the extension application from the Tribunal. If the petitioners fail to obtain an extension of the stay order by the respective dates, the respondent authorities are permitted to encash the cheques on those dates unless a copy of the Tribunal's order is presented before them in time.

Subject to the specified direction, the respondent authorities are restrained from proceeding with any coercive recovery for eight weeks. If the petitioners do not present a copy of the order on the extension application within eight weeks, followed by a certified copy, the respondent authorities are free to pursue the remedy of recovery in accordance with the law. The petition is allowed to the extent indicated, with no order as to costs.