Legal principle

A confirmed demand remains recoverable because a pending appeal is not a stay, but a recovery notice issued while the assessee's stay application is still undisposed of for reasons not attributable to the assessee cannot be sustained.

Court decision

The Court disposed of the group of petitions case by case. It quashed the impugned recovery notices in the matters reviewed in the extract (e.g., SCAs 2461, 2473, 2475, 2478, 2531, 2541-2547, 2576 and 2603 of 2013), where appeals accompanied by stay applications were pending before the Commissioner (Appeals) or the Tribunal and had not been decided for reasons not attributable to the assessees, such as pending hearing, orders reserved, no date of hearing, or non-availability of the Bench. In SCA 2423 of 2013, where the assessee had appealed before a wrong forum and then not obtained a stay, the Court granted one month to persuade the revisional authority and permitted recovery if no stay was granted by 15.4.2013. The respondents were directed to circulate the judgment to all Chief Commissioners for proper and uniform implementation.

Facts

A group of writ petitions, led by Gujarat State Fertilizer Co Ltd, challenged recovery notices issued by the Customs and Central Excise Department under section 11 of the Central Excise Act, 1944 read with CBEC Circular No.967/01/2013-CX dated 1.1.2013. The impugned circular rescinded a series of earlier circulars governing recovery of confirmed demands during pendency of appeals and stay applications, and directed recovery 30 days after filing of an appeal if no stay is granted, and immediate recovery where the Tribunal or High Court confirms the demand if no stay is in operation. In the lead matter, after a long Cenvat credit dispute, an order-in-original dated 26.11.2010 confirmed a duty demand of Rs.34,36,60,312/- with interest; the CESTAT upheld it and the assessee's Tax Appeal with stay application was pending before the High Court. At that stage, a notice dated 17.1.2013 called upon the petitioner to pay the entire amount within seven days on pain of attachment and sale of excisable goods.

Key provisions

• Section 151A, Customs Act, 1962 — Instructions to officers of customs
• Section 129E, Customs Act, 1962 — Deposit of certain percentage of duty demanded or penalty imposed before filing appeal
• Section 142, Customs Act, 1962 — Recovery of sums due to Government