2019 (3) TMI 1275 - AT - Central Excise

Recovery of confirmed dues and penalties - section 35 F of Central Excise Act, 1944, read with section 35 C (2 A) of Central Excise Act, 1944 and with rule 41 of Customs Excise Service Tax Appellate Tribunal (Procedure) Rules, 1982 - Held that - Had the officials concerned applied their mind to the judgement as a whole, instead of selectively culling out certain expressions therein, the present problem and potential chaos could well have been avoided. It is abundantly clear from the narration of the background facts, the observations therein and the catena of decisions of the Hon ble Supreme Court which have been discussed in detail that the controversy in re Asian Resurfacing of Road Agency Pvt Ltd pertained to delay arising from challenge to the framing of charges under the Prevention of Corruption Act, 1988. It is again abundantly clear that the Hon ble Supreme Court was concerned with the impeding of continuance of trial in the original courts owing to stay granted in applications for intervention by appellate authorities in exercise of revisionary jurisdiction under the Code of Criminal Procedure, 1973 or under the inherent powers vested with the constitutional courts under Article 227 of the Constitution. The ambit of the decision of the Hon ble Supreme Court is restricted to one aspect of appeals and, that too, pertaining to trial courts. This Tribunal is not a trial court; it is an authority established to dispose off appeals at the first or second level, as the case may be. The stay ordered by Tribunal is on the recovery of amounts not covered by the pre-deposit determined then; the proceedings before the lower authorities had concluded and the jurisdiction of the Tribunal had been triggered by the filing of the appeals. After examining the amendments effected to section 35C of Central Excise Act, 1944, the power vested in the Tribunal to decide upon continuation of stay of operation of impugned order, in circumstances of the appellant being helpless in the matter of disposal of appeal, is clearly delineated there. Therefore, the proper course of action for the officials was to approach the Tribunal for vacation of the stay - In the absence of such application, the stay order will continue to operate till the appeals herein are disposed off.

Summary

Issues:
1. Recovery of confirmed dues and penalties by central excise authorities.
2. Interpretation of the decision of the Hon'ble Supreme Court in Asian Resurfacing of Road Agency Pvt Ltd case.
3. Application of stay orders by the Tribunal in pending appeals.
4. Actions of central excise authorities in initiating recovery proceedings without extending stay orders.
5. Compliance with the directions of the Hon'ble Supreme Court and the Tribunal's decision in Haldiram India Pvt Ltd case.

Issue 1: Recovery of confirmed dues and penalties by central excise authorities:
The judgment deals with applications under section 35 F of Central Excise Act, 1944, regarding recovery of confirmed demands and penalties imposed by central excise authorities. The applicants were required to pay the confirmed dues, interest, and penalties as recovery proceedings were initiated due to the absence of a valid and continuing stay order.

Issue 2: Interpretation of the decision of the Hon'ble Supreme Court in Asian Resurfacing of Road Agency Pvt Ltd case:
The central excise authorities initiated recovery proceedings based on their interpretation of the Hon'ble Supreme Court's decision in the Asian Resurfacing of Road Agency Pvt Ltd case. The decision was related to stay orders in civil and criminal trials and the automatic vacation of stays after six months unless extended by a speaking order. The judgment emphasized the need for a proper understanding of the implications of the Supreme Court's decision to avoid potential chaos.

Issue 3: Application of stay orders by the Tribunal in pending appeals:
The Tribunal had issued stay orders in pending appeals, but there was ambiguity regarding the continuation of the stay till the disposal of the appeals. The judgment highlighted the importance of recording explicitly that the stay would continue until the disposal of the appeal to prevent recovery proceedings against appellants.

Issue 4: Actions of central excise authorities in initiating recovery proceedings without extending stay orders:
The central excise authorities initiated recovery proceedings without extending the stay orders issued by the Tribunal, leading to potential chaos and confusion. The judgment criticized the officials for not applying their minds to the Supreme Court's decision as a whole and for disregarding the implied bar on recovery in all orders disposing of stay applications.

Issue 5: Compliance with the directions of the Hon'ble Supreme Court and the Tribunal's decision in Haldiram India Pvt Ltd case:
The judgment emphasized the need for compliance with the directions of the Hon'ble Supreme Court and the Tribunal's decision in the Haldiram India Pvt Ltd case regarding the stay of operation of orders of lower authorities. It was held that the proper course of action for the central excise authorities was to approach the Tribunal for vacation of the stay instead of initiating recovery proceedings.

This detailed analysis of the judgment provides insights into the issues surrounding the recovery of confirmed dues, interpretation of legal decisions, application of stay orders, actions of central excise authorities, and the importance of compliance with legal directions.