Stay continuation bars recovery during pending final hearing; Tribunal used inherent powers to keep the stay operative.

Where an appeal was already fixed for final hearing and the Revenue appeal was directed to be linked, recovery of the disputed amount was held impermissible while the matter remained pending. Applying Rule 41 of the CESTAT (Procedure) Rules and its inherent powers, the Tribunal continued the earlier stay order until disposal of the appeal, restraining the Department from pursuing recovery in favour of the assessee.

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Issues: Whether the stay already granted should continue in operation and whether recovery proceedings could be pursued while the appeal was fixed for final hearing.

Analysis: The appeal was already listed for final hearing and the Revenue's appeal was directed to be linked with it. In that situation, recovery of the disputed amount was held to be impermissible. The Tribunal also accepted that, by applying Rule 41 of the CESTAT (Procedure) Rules and its inherent powers, the earlier stay order could continue to operate pending disposal of the appeal.

Conclusion: The stay was continued and the Department was restrained from recovery until disposal of the appeal, in favour of the assessee.

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