Stay on recovery where excise credit delay followed an approved storage procedure and awaited High Court determination

Recovery pending the High Court's determination of a referred question of law was stayed because the assessee had followed a procedure permitted by the excise authorities for storing inputs outside the factory and taking credit only after receipt of the last lot. The delay in availing credit beyond the six-month period was attributable to compliance with that approved procedure, making immediate recovery inappropriate until the legal issue was decided. Stay on recovery was granted in favour of the assessee.

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Issues: Whether recovery pursuant to the Tribunal's final order should be stayed pending determination of the question of law by the High Court.

Analysis: The application was considered in the context of the High Court's direction to refer the question of law and the special facts that the assessee had followed a procedure permitted by the Central Excise authorities for storage of inputs outside the factory and for taking credit only on receipt of the last lot. The resulting delay in availing credit beyond the six-month period arose from compliance with that approved procedure. In those circumstances, continuation of recovery was found to be unjustified pending the High Court's determination.

Conclusion: The stay on recovery was granted in favour of the assessee.

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