Prospective Disobedience of Appellate Orders - Board Clarifies Draconian 2006 Circular
BY Circular No. No. dated 16th January, 2006, Board had clarified that the pre-deposit waiver orders given by Commissioner (Appeals) or CESTAT are only in respect of the Demand confirmed and not for the future period.
In - 17 01 2006 we had reported, “Board wants the field to respect the stay orders of the appellate authorities only for the past period but to implement the impugned order prospectively. In simple terms this means if the central excise Commissioner passes an order that the mangoes grown in the factory premises are dutiable and demands duty and the assessee goes to the Tribunal and gets a stay and waiver of pre deposit, Board will honour the Tribunal's order only for the past period and for future clearances you may have to pay excise duty on those mangoes, unless the Tribunal specifically mentions that the stay applies for future too.”
Now nearly after three years, Board is informed that some Commissioners have actually seized those mangoes.
The Board's latest circular states,
Attention is invited to Board's Circular No. dated 16th January, 2006 on the aforesaid subject. It has been reported that some of the Commissionerates have taken a view that once an order has been passed on issues like classification/valuation etc., in that case, all subsequent removals must follow the said order even though appeal of the assessee against the said order is pending. It has further been reported that in case of removal without conforming to the said order, the goods have been seized on the ground that these have been cleared in violation of the order passed by the Adjudicating Authority .
So the Board has now clarified that,
the said circular nowhere provided for seizure of goods, which are cleared not in conformity with the adjudication order when the appeal against the said order is pending. Therefore, in such cases protective show cause notices should be issued to safeguard the revenue, and seizure of goods only for the aforesaid reason should not be effected.
If the Board gives a beneficial circular, the clever commissioners are quick to find holes and deny the benefit to the assessees and if Board gives a circular that is not favourable to the assessees, the Commissioners go that extra mile to add a few more whips! The best option would be for the Board not to clarify any issue – whatever you do, the assessee has to suffer!
Also please a related article - CODE OF HAMMURABI – THE CBEC'S WAY.
CBEC Circular No. 906/26/2009-CX., Dated: December 3, 2009