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TMI Blog2013 (4) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... rieved thereby, seek redress. 2. We have heard Mr. Rishabh Khandelwal , Mr. Sanjay Jhanwar , Mr. Sameer Jain, Mr. R. L. Agarwal and Mr.P.K.Kasliwal , learned counsel appearing for the petitioners and Mr.Anil Mehta and Mr. Ajay Shukhla , learned counsel appearing for the respondents. 3. Considering the subject matter of assailment and the analogy of the grounds thereof, dilation on the individual facts is considered inessential and skeletal narration of the factual background from the pleadings of lead case- D.B.Civil Writ Petition No. 1891/13 would suffice. The petitioner- Mangalam Cement Limited has pleaded that it is engaged in the business of production/manufacture and sate of cement and is registered manufacturer of excisable goods. A show cause notice being C.No.V ( 25)3 /18/Demand/2011/4152 dated 13.6.2011 was issued by the departmental authorities on the basis of scrutiny of monthly ER Returns filed by the petitioner for the months from June, 2010 to December, 2010 alleging that it had availed the cenvat credit of service tax paid on different services received by it in relation to maintenance and repair works of its residential colony, which did not appear to be eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60 days for filing appeal. 2. Commissioner (Appeals) Appeal filed without stay application against a confirmatory order in original Recovery to be initiated after such an appeal has been filed without waiting for the statutory 60 days period to be exhausted. 3. Commissioner (Appeals) Appeal filed with a stay application against an order in original. Recovery to be initiated 30 days after the filing of appeal, if no stay is granted or after the disposal of stay petition in accordance with the conditions of stay, if any specified, whichever is earlier. 4. Nil No appeal filed against an Order in Original issued by the Commissioner Recovery to be initiated after expiry of statutory period of 90 days for filing appeal from the date of communication of order. 5. CESTAT Appeal filed without stay application against an Order in Original issued by the Commissioner Recovery to be initiated on filing of such an appeal without waiting for the statutory 90 days period to be exhausted. 6. CESTAT Appeal filed with a stay application against an Order in Original issued by the Commissioner. Recovery to be initiated 30 days after the filing of appeal, if no stay is grante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, as proposed to be done, is permissible and on that ground alone, the impugned circular is liable to be adjudged inoperative and invalid, in absence of Rules framed by the Central Government as contemplated in Section 37(2)( ib ) of the Act, the proposed mode of recovery is wholly incompetent and unauthorized, they urged. While contending that neither Section 37B of the Act nor Rule 31 of the Central Excise Rules, 2002 (for short, hereafter referred to as "the Rules") envisages instructions akin to those contained in the impugned circular, the learned counsels maintained that in any view of the matter, the action proposed is illegal, unfair and arbitrary and is only a pretentious move to represent a zealous endeavour to realize the pending demands with the impending closure of the current financial year. According to the learned counsel, as the petitioners have filed their appeals with the application for stay within time in the exercise of their statutory right under the Act and are by no means responsible for the delay in the disposal thereof, the directions for recovery as mandated by the impugned circular with time frames prescribed for different contingencies, are not only p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... don and ors . ((2010) 8 SCC 110 ). 9. We have evaluated the rival arguments. To start with, a plain perusal of the circular dated 1.1.2013 would unequivocally demonstrate that it is in the form of administrative instructions issued by the Central Board or Excise and Customs, New Delhi (for short, hereafter referred to as "the Board") obligating the concerned authorities to initiate recovery proceedings against the confirmed demands in the eventualities narrated therein fixing periods therefore. Broadly, three situations have been contemplated (1) where no appeal has been filed against a confirmatory order in original; (2) where an appeal has been filed without stay application against a confirmatory order in original; and (3) where an appeal has been filed with a stay application against such order. In the first contingency, in terms of this circular, the process of recovery is to be initiated after the expiry of statutory period of 60 days' for filing appeal and in the second, after the institution of the appeal. In the third eventuality, the process of recovery has been mandated to be initiated 30 days after the filing of appeal, if no stay is granted or after the disposal of st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4), if it is satisfied that there was sufficient cause for not presenting it within that period. In terms of sub-section ( 2A ) of Section 35C , the Tribunal, where it is possible to do so, is obligated to hear and decide every appeal within a period of three years from the date on which such appeal is filed. Proviso thereto provides that where order of stay is made in any proceedings relating to an appeal filed under sub-section (1) of Section 35B , the Tribunal would have to dispose of the appeal within a period of 180 days' from the date of such order failing which the stay order on the expiry of that period would stand vacated. Section 35F prescribes for the deposit of the duty demanded or penalty levied pending appeals in the contingencies as contemplated therein. The first proviso, however, authorizes the Commissioner (Appeals) and the Tribunal to dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of the revenue, if he/it is of the opinion that such deposit of duty demanded or penalty levied would cause undue hardship to the assessee . The second proviso, however, enjoins that when an application is filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Rules. In the teeth of the framework of the Act outlined under Chapter VIA of the Act, the impugned circular is conspicuously dissentient thereto qua the eventualities where appeals with applications for interim relief by way of dispensation of deposit of duty demanded or penalty levied are filed but pending without any decision whatsoever sans any default on the part of the assessee and for that matter, the appellants. Any view to the contrary would be repugnant to the statutory comprehensions and the underlying intendment of the Act providing the statutory remedies against the orders demanding duty and penalty as contemplated therein. The right of appeal being statutory in nature, the incidental provision for exemption, in deserving cases, by way of interim relief, from making the otherwise mandatory deposit of duty demanded or penalty levied, can by no means be trivialized or annihilated by any administrative ukase. Such a conferment can permissibly be circumscribed only by and to the extent ordained by the statute. The extinction of such a statutorily conferred right by any administrative fiat without the sanction of the enactment endowing the same is impermissible. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... measures were taken to recover the amount due. While directing the disposal of the appeal and application for exemption within the time frame of two months, a Coordinate Bench of this Court observed thus :- "4. It is really unfortunate that the respondents are creating such a condition in which the applications under Section 35F of the Act are being kept pending decision for a considerable period and during the intervening period recoveries are being effected by coercive process. Whenever an assessee files an appeal alongwith an application for exemption from condition of pre-deposit he legitimately expects that such an application shall be disposed of first and then only the recoveries are effected. It is, therefore, necessary for the respondents to devise a fair procedure so that grievance of such assessee is redressed and no amounts are recovered by coercive process before the application for exemption from the condition of pre deposit is disposed of." 17. This proposition, as quoted above, would proclaim not only the recognized legitimate expectation of petitioner- assessee that its appeal be disposed of first and then only the recovery would be effected, it emph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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