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2013 DIGILAW 436 (KAR)

Rittal India Pvt. Ltd. v. Union of India

2013-04-02

RAM MOHAN REDDY

body2013
ORDER Ram Mohan Reddy, J.—Petitioner aggrieved by the three orders of assessment for various periods, preferred three appeals together with three applications for stay on 11.10.2007; 04.03.2008 and 04.03.2008 respectively. The interim stay. applications when not considered by the Appellate Authority and orders passed thereon, are said to be pending. Thus, the Appellate Authority has neither granted stay nor refused to grant stay. In the meanwhile, the third respondent acting on the basis of a Circular dated 01.01.2013 Annexure 'C', issued Demand Notice dated 12.03.2013 Annexure 'D' for recovery of the amounts, subject matter of three appeals. Hence this petition calling in question the Circular as well as the Demand Notice. 2. Learned counsel for the petitioner submits that even according to the Circular Annexure 'C', more appropriately at Sl. No. 3 therein against the column with a nomenclature "Directions regarding recovery", recovery is 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 and such a situation having not arisen, since the Appellate Authority has not considered the applications for stay and orders passed. thereon, the third respondent had no jurisdiction to issue a Demand Notice Annexure 'D', making reference to the Circular Annexure 'C'. 3. Per contra, learned counsel for the respondent-Revenue on instructions from the third respondent, who is present before Court, submits that the issue of the Demand Notice Annexure 'D' is in accordance with the direction issued by the Central Board of Excise and Customs, New Delhi in the notification Annexure 'C' and that it was for the petitioner to have moved the Appellate Authority for orders on interlocutory applications for stay and having not done so, cannot question the demand. 4. In order to appreciate the rival contentions of the parties, as held by the learned counsel, it is useful to extract Sl. No. 3 of the notification dated 01.01.2013 Annexure 'C' of Central Board of Excise and Customs, which runs thus:- 5. 4. In order to appreciate the rival contentions of the parties, as held by the learned counsel, it is useful to extract Sl. No. 3 of the notification dated 01.01.2013 Annexure 'C' of Central Board of Excise and Customs, which runs thus:- 5. A bare perusal of the directions issued by the Central Board of Excise and Customs, what is discernible is that recovery proceeding can be initiated 30 days after the filing of the appeal if and if only no stay is granted or after the disposal of stay petition in accordance with the conditions of stay, if any specified, whichever is earlier. Therefore, applying the same to the facts of this case, the three appeals languishing before the Appellate Authority without orders on the interlocutory applications for stay, in other words, there being no order passed by the Appellate Authority either directing stay or refusing stay, the third respondent fell in error in issuing the Demand Notice Annexure 'D', making reference to the Circular Annexure 'C' for recovery, as directed by the Central Board of Excise and Customs, New Delhi. It is not the case of the third respondent that the Appellate Authority in the appeals preferred by the petitioner had passed an order refusing stay and if that is so, then the third respondent ought to have requested the Appellate Authority to proceed with the case and that the appellant being a party in the appeal, to pass orders on the interlocutory applications for stay and not issue demand notice Annexure 'D'. 6. In identical circumstances, when Annexure 'C' - Circular came up for consideration before the High Court of Bombay in Larsen and Toubro Vs. Union of India and Others 2013 TIOL 99 HC MUM CX, it was observed thus: For these reasons, we have come to the conclusion that the provisions contained in the impugned circular dated 1 January 2013 mandating the initiation of recovery proceedings thirty days after the filing of an appeal, if no stay is granted, cannot be applied to an assessee who has filed an application for stay, which has remained pending for reasons beyond the control of the assessee. Where however, an application for stay has remained pending for more than a reasonable period, for reasons having a bearing on the default or the improper conduct of an assessee, recovery proceedings can well be initiated as explained in the earlier part of the judgment. Learned counsel for the parties jointly submit that these petitions be disposed of in the like terms noticed supra. 7. Learned counsel for the respondent-Revenue submits that if the appeals and interlocutory applications are not heard by the Commissioner, Union of India will suffer loss of revenue and therefore, a direction be issued to the Commissioner for disposal of the appeals at the earliest or pass orders on the interlocutory applications for stay. 8. Petitioner, not being the cause for the Appellate Authority not to hear and pass orders on interlocutory applications, cannot be found fault with. All that can be said, in the circumstances, is that the Union of India must refrain from initiating recovery proceedings in respect of the amounts due in terms of the order impugned in the appeals until final orders are passed in appeals or orders on interlocutory applications for stay. In that view of the matter, these petitions are disposed of with a direction to the Appellate Authority to consider and pass orders on the interlocutory applications for stay as expeditiously as possible and until such time, the third respondent is refrained from initiating recovery proceedings.