2014 (9) TMI 475 - HC - Central Excise

Legality and validity of the demand notice issued - Circular No. 967/01/2013-CX, dated 1-1-2013 - Circular declared non est by court - Held that - With the legal position having been concluded by the Court more than 7 months back and in no uncertain terms, this Court having pronounced the Circular in question non est insofar relating to the situation where the stay applications remain pending in the appellate fora, it sounds rather strange that the concerned Superintendent Central Excise has at all chosen to issue the questioned notice on the basis of the same Circular. Prima facie the notice is of a show of total disrespect to and defiance of the order passed by this Court. The order passed by this Court on 1-3-2013, both in its letter as also in its spirit, leaves nothing to doubt or guess that this Court has pronounced the impugned Circular dated 1-1-2013 non est in relation to the situation as obtaining in the present case. Any attempt to yet initiate the coercive proceedings on the basis of the this very Circular gives rise to serious questions on the approach and intentions of the respondents. - Stay granted. A separate suo motu contempt petition be registered - a notice shall be issued to the incumbent of the office of the respondent No. 1 i.e., the Superintendent, Central Excise & Service Tax, Range-I, Gandhi Nagar, Bhilwara to show cause as to why contempt proceedings be not initiated against him for deliberate defiance of the order dated 1-3-2013 passed by this Court.

Summary

Issues:
1. Legality and validity of demand notice dated 8-10-2013 for Service Tax.
2. Appeal filed before CESTAT and adjournments.
3. Impugned demand notice issued with reference to Circular No. 967/01/2013-CX.
4. Superintendent issuing demand notice despite Court's decision on Circular.
5. Court's decision on Circular dated 1-1-2013 and implications.
6. Order passed by Coordinate Bench on 15-4-2013.
7. Superintendent's actions in defiance of Court's order.
8. Contempt proceedings against Superintendent for defiance of Court's order.

Analysis:
1. The petitioner challenged the legality and validity of a demand notice dated 8-10-2013 for Service Tax amounting to Rs. 15,78,40,282/- with interest and penalty imposed in the sum of Rs. 17,08,00,086/- under Order-in-Original No. 40-41/2012/ST/JPR-II/4060, dated 26-10-2012.
2. An appeal and Stay Application were filed by the petitioner-assessee before CESTAT on 7-2-2013, facing adjournments due to bench availability issues.
3. The impugned demand notice was issued with reference to Circular No. 967/01/2013-CX, despite the Court declaring the Circular as non est, directing hearing of appeals and interim applications at the earliest.
4. The Court expressed dismay over the Superintendent issuing the demand notice with reference to the Circular despite the Court's decision declaring it non est.
5. The Court's decision on Circular dated 1-1-2013 held it non est for situations where appeals with stay applications were filed but no stay was granted due to reasons not attributable to the assessees.
6. A Coordinate Bench passed an order on 15-4-2013, allowing the petitioner to submit a copy of the judgment dated 1-3-2013 to the concerned authority.
7. Superintendent's actions in issuing the demand notice based on the Circular, despite the Court's clear pronouncement declaring it non est, raised concerns of defiance.
8. The Court considered initiating contempt proceedings against the Superintendent for deliberate defiance of the Court's order dated 1-3-2013, directing a notice to show cause why contempt proceedings should not be initiated.