2013 (4) TMI 251 - HC - Central Excise

High Court halts tax recovery pending tribunal decision on waiver & stay applications, citing tribunal vacancy impact.

The High Court directed the respondents not to take coercive measures for recovery of tax liabilities pending disposal of petitioners' applications for ... Recovery proceedings - Circular dated 1-1-2013 - Held that:- Tribunal is not functioning on account of a vacancy in the office of the Technical Member; and the Tribunal is unable therefore to take up the petitioners applications for waiver for pre-deposit and for grant of stay of levy of the tax, interest and penalties, as the case may be - A fact not disputed by the Revenue We consider 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 - The writ petitions are disposed of as above. But in the circumstances without costs. Issues: Ineffectual functioning of the Tribunal leading to delays in disposal of applications for waiver and stay of tax. Challenge to a Circular issued by the Central Board of Excise and Customs regarding recovery proceedings.Analysis:Issue 1: Ineffectual Functioning of the TribunalThe judgment addresses the core issue of the ineffectual functioning of the Tribunal due to a vacancy in the office of the Technical Member, leading to delays in processing applications for waiver of pre-deposit and stay of tax. The petitioners had preferred appeals against Orders-in-Original, which were rejected, prompting them to appeal to the Tribunal. However, due to the non-functioning of the Tribunal, their applications for waiver and stay were not being processed. The petitioners sought relief from the High Court to prevent the initiation of coercive measures by the Revenue until their applications were disposed of by the Tribunal. The Court, after hearing both parties and acknowledging the Tribunal's ineffectual functioning, directed the respondents not to take any coercive measures for recovery of Central Excise or Service Tax liabilities pending disposal of the petitioners' applications for waiver and stay.Issue 2: Challenge to Circular on Recovery ProceedingsSome of the writ petitions challenged a Circular issued by the Central Board of Excise and Customs, which directed Revenue to initiate recovery proceedings 30 days after the appeal filing if no stay was granted. However, the petitioners did not press this challenge in the writ petitions. Instead, they requested the Court to direct Revenue not to initiate coercive measures until the Tribunal decided on their applications for waiver and stay. The Court, considering the current situation of the Tribunal and the petitioners' concerns, disposed of the writ petitions without costs, instructing that coercive measures for recovery should not be taken until the Tribunal addressed the petitioners' applications.In conclusion, the High Court's judgment in this case primarily focused on addressing the issues arising from the ineffectual functioning of the Tribunal and the challenges related to the Circular on recovery proceedings. By directing the respondents not to initiate coercive measures until the Tribunal disposed of the petitioners' applications for waiver and stay, the Court provided interim relief to the petitioners affected by the delays in processing their appeals and applications.