2011 (12) TMI 170 - HC - Central Excise

Appeal and stay application preferred before Commissioner (Appeals) Department initiated steps for recovery of the demand while appeal and stay application is pending Held that - Direction is issued to Department to not recover the disputed demand till the Commissioner (Appeals) decides the application for stay. It is open to the Commissioner (Appeals) to take up the application for stay expeditiously. - Decided in favor of assessee.

Summary

Issues involved:
1. Disputed duty demand on electric wires and cables under Central Excise Act, 1985.
2. Delay in deciding stay application by Commissioner (Appeals).
3. Recovery of disputed demand pending the decision on the stay application.

Analysis:

Issue 1: The petitioner, a manufacturer of electric wires and cables, faced a disputed duty demand under the Central Excise Act, 1985. Initially, a provisional assessment order required a bank guarantee of Rs.79 lakhs. Subsequently, an order by the Assistant Commissioner of Central Excise was in favor of the petitioner, allowing certain discounts as deductions from the assessable value. However, this decision was challenged by the Department, leading to a remand for fresh assessment by the Assistant Commissioner, who then confirmed a duty demand of Rs.3,90,48,865.89 due to alleged short payment of excise duty on the aggregate value of discounts.

Issue 2: The petitioner's appeal against the order of the Assistant Commissioner was transferred to the Commissioner (Appeals) at Delhi. Despite the appeal and a stay application being pending since 2009, the Commissioner had not decided on the stay application, causing significant delay in the resolution of the matter.

Issue 3: In light of the prolonged pendency of the appeal and stay application, the Court directed the respondents not to recover the disputed demand until the Commissioner (Appeals) decided on the application for stay. The Commissioner was urged to expedite the stay application process, with a specific instruction for the petitioner to cooperate and avoid seeking unnecessary adjournments during the proceedings.

In conclusion, the Court disposed of the writ petition, providing clear directions to ensure a fair resolution of the disputed duty demand issue while emphasizing the need for expeditious decision-making by the Commissioner (Appeals) to address the pending stay application effectively.