2013 (4) TMI 78 - HC - Central Excise

Recovery proceedings - Circular dated 1st January 2013 mandating the initiation of recovery proceedings thirty days after filing of the appeal calls for interference - Held that - There is large pendency of appeals for hearing before the authorities and there being only one bench of CESTAT at Bangalore, with territorial jurisdiction over three southern States, no useful purpose would be served by directing consideration of applications for stay at this distance of time. Regard being had to the fact that the Union of India has failed to set up large number of Tribunals such as CESTAT and if this is done, then there would be no cause for complaint over the non-consideration of the applications for stay, in appeals, by only one Tribunal, presently functioning at Bangalore. This should be an eye opener for Union of India to establish and constitute any number of Tribunals in all the States in the Country - Petitions are accordingly ordered.

Summary

Issues:
1. Interpretation of Circular dated 1st January 2013 mandating recovery proceedings after the filing of an appeal.
2. Delay in disposal of appeals and interlocutory applications by the Commissioner of Appeals and CESTAT.
3. Impact on revenue loss to the Union of India due to pending appeals.
4. Lack of sufficient Tribunals for timely disposal of appeals.

Analysis:

1. The judgment dealt with the interpretation of a circular dated 1st January 2013 regarding the initiation of recovery proceedings thirty days after the filing of an appeal if no stay is granted. The High Court referred to a similar case in the High Court of Bombay and concluded that recovery proceedings cannot be initiated if an application for stay is pending due to reasons beyond the control of the appellant. However, if the delay is due to the default or improper conduct of the appellant, recovery proceedings can be initiated.

2. The delay in disposal of appeals and interlocutory applications by the Commissioner of Appeals and CESTAT was highlighted. The counsel for the parties jointly submitted that the petitions should be disposed of in similar terms as observed in a previous case. The Court acknowledged the large pendency of appeals before the authorities and the limited benches available, which might hinder the timely consideration of applications for stay.

3. The Central Government Standing Counsel raised concerns about the potential revenue loss to the Union of India if appeals and interlocutory applications are not heard promptly. The Court recognized the validity of this concern but also noted that there could be justifiable reasons for the delay in disposal of appeals. The Court directed the authorities to refrain from initiating recovery proceedings until final orders are passed on the appeals or interlocutory applications for stay.

4. The judgment also highlighted the lack of a sufficient number of Tribunals, such as CESTAT, in various states, leading to delays in the disposal of appeals. The Court emphasized the need for the Union of India to establish and constitute more Tribunals across the country to ensure timely consideration of applications and disposal of appeals. The judgment concluded by ordering the petitions accordingly, taking into account the issues raised and the need for efficient disposal of appeals.