2018 (11) TMI 162 - HC - Central Excise

Attachment of bank account and property - duty demand of ₹ 88 lakhs - Held that - Today there is an amount of ₹ 88 lakhs due and payable by the Petitioner to the Revenue and the same needs to be secured. Therefore, we do not interfere with the order of the Respondents attaching the Petitioner s residential flat till such time as the Tribunal takes a final view on the Appeal filed by the Petitioner. However, the attachment of the bank account in these facts is not justified. The attachment of the residential flat is not to be interfered with at this stage - Respondents have already vacated attachment of the bank accounts - petition disposed off.

Summary

Issues Involved:
Challenge to recovery proceedings leading to attachment of bank account and immovable property, interpretation of CBIC Circular, application of Circular on recovery proceedings, vacation of attachment of bank account and immovable property, appeal filed to Tribunal, lifting/vacating attachment of residential house, security for amounts due to Revenue, justification of attachment of bank account, security of dues, coercive proceedings during appeal process.

Analysis:

1. Challenge to Recovery Proceedings:
The Petition under Article 226 challenges the recovery proceedings resulting in the attachment of the Petitioner's Bank Account and immovable property. The proceedings were initiated following an order passed by the Additional Commissioner of CGST & Central Tax under the Central Excise Act, 1944. The Petitioner contends that the recovery proceedings should have been stayed upon filing an Appeal to the Commissioner (Appeals) with the necessary pre-deposit, as per Section 35F of the Act. The Revenue, however, asserts that the attachment occurred after the order was served and the statutory period for filing an Appeal had elapsed. The interpretation of the CBIC Circular and its application hinges on the date of service of the order upon the Petitioner, a factual issue to be determined by the Commissioner (Appeals).

2. Vacation of Attachment of Bank Account and Immovable Property:
After the Commissioner (Appeals) dismissed the Petitioner's Appeal as time-barred, the Petitioner filed an Appeal to the Tribunal and sought vacation of the attachments based on a decision of the Kerala High Court. The Court directed the Petitioner to file the Appeal to the Tribunal and inform the Respondents about the Kerala High Court decision. The Petitioner subsequently communicated with the Revenue seeking the vacation of attachments.

3. Security and Justification of Attachments:
The Revenue vacated the attachment of the bank account but sought to continue the attachment of the residential house as security for the amounts due. The Petitioner requested the lifting of the attachment on the residential house to enable raising loans against the property. The Court found that an amount of ?88 lakhs was due from the Petitioner to the Revenue, and while the attachment of the residential house was justified as security, the attachment of the bank account was not warranted, especially in light of the Kerala High Court decision. The Respondents were directed not to resort to coercive measures to recover dues by selling the residential flat until the Tribunal's final decision on the Appeal.

4. Disposition of the Petition:
The Court disposed of the Petition without disturbing the attachment of the residential house until the Tribunal's final decision on the Appeal. The Respondents were prohibited from taking coercive actions to recover dues by selling the residential flat during the pendency of the Appeal process, ensuring the security of amounts due to the Revenue.

This detailed analysis covers the various issues involved in the legal judgment, addressing the challenges to recovery proceedings, vacation of attachments, security measures, and the final disposition of the Petition.