CBEC Draconian Circular - Recovery Action without mentioning Circular - Recovery Stayed: HC
IN the last one month or so, several High Courts have directed stay of the recovery initiated as per Board's New Year Circular 967/01/2013-CX. It is easy to submit to the Court that the Circular is draconian, arbitrary and illegal and in High Courts were Stay of recovery is already granted, all that a lawyer has to do is just mention that this is the Circular case and immediately the Bench understands and stay of recovery is instantly granted and the advocates (including the Government's) smile all the way to the bank.
A Commissioner came up with a brilliant idea to thwart this. His officers started issuing recovery notices threatening attachment and attendant consequences if the demands confirmed were not immediately paid up, if there were no stay orders or if the stay orders have lapsed (after 180 days). They made no mention of the 1st January Circular of the Board, assuming that the Department always had the draconian powers and a duty to harass the assessees with or without the Circular.
But the Andhra Pradesh High Court granted stay of recovery even in such cases, in a batch of writ petitions. The writ petitions consisted of
1. Central Excise Cases
2. Service Tax cases
3. Appeals (with stay petitions) against Orders in Original
4. Appeals (with stay petitions) against Orders in Appeal
In some of the writ petitions the Circular dated 1-1-2013 issued by the Central Board of Excise and Customs has been challenged, where under a generic directive is issued to Revenue to initiate recovery proceedings 30 days after filing of the appeal, if no stay were granted.
Having heard the respective parties and in the context of the current ineffectual functioning of the Tribunal, a fact not disputed by the Revenue, the High Court considered it appropriate to dispose of the writ petitions directing the respondents not to initiate any coercive measures for recovery of the Central Excise liability or Service Tax liability or interest and penalties, as the case may be, as assessed in the Orders-in-Original or as confirmed in the appeals, as the case may be, pending disposal of the applications filed by the petitioners for waiver of pre-deposit and wherever filed, the applications for stay of the Central Excise or Service Tax, interest and penalties, as the case may be. The liability of the petitioners to remit the tax, interest and penalties, as assessed or confirmed, as the case may be, shall be subject to orders to be passed by the Tribunal in the interlocutory applications preferred by the petitioners.