SHREE CEMENT LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition has come in a peculiar circumstance. The petitioner has preferred an appeal before the CEGAT against the order passed by the respondent No. 3, Deputy Commissioner, Central Excise and Customs, Ajmer. He also moved an application for staying the recovery during the pendency of stay application before the CEGAT and which was pending for consideration and no final order has been passed on that application for staying the recoveries and dues during the pendency of stay application or application filed before the Tribunal. The Central Board of Excise and Customs had issued guidelines for the officers of the department to follow and deal with the guidelines for recovering the dues during the pendency of stay petition/application before the appellate authorities. It will be apposite to reproduce the circular dated, March 2, 1990 (annexure 9) hereinbelow : " Circular No. 7/90-CX. 6, dated March 2, 1990 [from F. No. 208/107/89-CX. 6] Government of India Central Board of Excise and Customs New Delhi. Subject : Central Excise - Recovery of dues during pendency of stay petition/application-Regarding. Reference instructions issued by the Ministry vide F. No. 208/31/88-CX. 6, dated 18th November, 1988 (Circular No. 80/88-CX. 6) on the subject mentioned above. Suggestions for enhancing the waiting period from the present 3 months as laid down under the above instructions to 5 months before initiating coercive measures for recovery of Central excise dues have been received from the trade. The Board has carefully examined the suggestions and has not accepted the same. However, the Board felt that it was hardly fair and just to proceed with the recovery proceedings while application for stay of the impugned order or for waiver of the condition of pre-deposits was pending before the appellate authorities. The Board, therefore in partial modification of the letter dated 18th November, 1988 has decided to accept the ratio of the judgments delivered by the Bombay High Court in Writ Petition Nos. 3919 of 1987, 422 of 1988 and 518 of 1988. Copies of the judgments are enclosed for circulation and guidance of the field formations. Collectors (Appeals) are separately being directed to dispose of stay applications expeditiously. "

(2.) ANNEXURE 10 dated June 2, 1998 which relates to the similar directions issued in respect of pendency of appeal and stay application in respect of staying the recovery of duty demanded as result of adjudication till such time as the appeal/stay applications filed by the appellant has been disposed of by Commissioner (Appeals ). The circular, annexure 10 reads as below : " Circular No. 392/29/98-CX, dated June 2, 1998 [from F. No. 201/02/98-CX. 6] Government of India Ministry of Finance (Department of Revenue), Central Board of Excise & Customs, New Delhi. Subject : Central Excise - Whether coercive measures to recover duty demanded as result of adjudication till such time as the appeal/stay applications filed by the appellant has been disposed of by Commissioner (Appeals) be taken - Regarding. On the question of recovery of dues during pendency of stay application before the Commissioner (Appeals), the matter was examined by the Board and necessary instructions were issued vide Circular No. 23/90/cx. 6, dated December 12, 1990 issued from F. No. 209/107/89-CX. 6 and Circular No. 16/92-CX. 6, dated November 12, 1992 issued from F. No. 208/59/92-CX. 6. According to these instructions, Central excise officers were to allow a period of three months from the date of decision for payment of dues adjudicated before resorting to coercive measures to recover such dues. However, if the stay application is rejected by the Commissioner (Appeals) even before the lapse of time of three months, recovery proceedings should be initiated immediately. The Commissioner (Appeals) were also directed to dispose of stay application within the period of two months in case the Commissioner (Appeals) was not in a position to dispose of the main appeal within the same time frame. Recently, the Mumbai High Court has ordered, that Commissioner (Appeals) may be directed to dispose of stay application within the specified time-limit and during the pendency of stay application no coercive action should be taken to realise the arrears of revenue. Keeping the aforesaid in view, the Board has decided that no coercive action should be taken to realise the dues till the disposal of the stay application by the Commissioner (Appeals) and the Commissioner (Appeals) must dispose of the stay application within one month of its filing. "

(3.) THE context of the circular reveals that prior to issuance of this Circular the Board vide its earlier circular dated November 18, 1988 referred to in exhibit 9 itself had issued instructions to all officers for not to proceed for recovery of demands by coercive process only for a period of three months in such cases and it was considering the suggestions for enhancing the waiting period to five months in place of three months then currently in vogue. This suggestion of extending waiting period by a straitjacket direction was not considered expedient. Instead the Board issued a broad based general direction in consonance with fairness of procedure demanded of State authorities and instructed its officers not to proceed with recovery proceedings until application for staying such demand is pending before appellate authorities and is not decided. In issuing this direction the Board was giving effect to its acceptance of ratio laid by the Bombay High Court a decision referred to in the said circular.