Court prohibits coercive recovery during pending stay applications, emphasizes fair treatment and natural justice principles.

The Court held that coercive recovery proceedings cannot be initiated when stay applications are pending for a reasonable period without fault on the assessee's part. It directed appellate authorities to promptly decide stay applications within eight weeks and prohibited coercive recovery measures until then, emphasizing fair treatment and adherence to natural justice principles. The petitioners were instructed to appear before the relevant appellate authority/CESTAT for further proceedings.

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Issues involved:
Challenging Circular dated 1-1-2013 of Central Board of Excise and Customs regarding recovery proceedings against confirm demand during pending appeals.

Detailed Analysis:

Issue 1: Validity of Circular dated 1-1-2013
The petitions under Art. 226 challenge the Circular dated 1-1-2013 by the Central Board of Excise and Customs, which directed recovery proceedings against confirm demand during pending appeals before appellate authorities. The petitioners argue that coercive methods should not be allowed when stay applications are pending without any fault on their part, as it penalizes them for situations beyond their control, violating Art. 14 of the Constitution.

Issue 2: Examination by High Court of Bombay
The High Court of Bombay previously examined the Circular dated 1-1-2013 and held that recovery proceedings cannot be initiated if an application for stay is pending for a reasonable period due to reasons not attributable to the assessee's conduct. The Court directed that no coercive steps for recovery should be taken until the stay application is disposed of, emphasizing the importance of expeditious disposal of such applications.

Issue 3: Coercive Recovery Measures
The petitioners in the present case have filed appeals along with stay applications pending before appellate authorities/CESTAT. Despite the pending applications, the Department issued recovery notices after the stipulated period mentioned in the Circular dated 11-1-2013. The petitioners argue that coercive recovery measures should be halted until their applications are heard and decided to ensure fair treatment and adherence to natural justice principles.

Issue 4: Court's Observations and Directions
The Court concurs with the submissions made and finds that coercive recovery methods during the pendency of stay applications harm the assessee and go against the principles of natural justice. It directs the appellate authorities/CESTAT to hear and decide stay applications promptly, restraining the Department from coercive actions until then. The Court emphasizes the importance of redressing grievances of the assessee and avoiding undue delays in decision-making processes.

Conclusion:
The petitions are disposed of with directions for the prompt hearing and decision on stay applications by the appellate authorities/CESTAT, preferably within eight weeks. Coercive recovery measures are prohibited until the applications are resolved. The petitioners are instructed to appear before the relevant appellate authority/CESTAT for further proceedings.

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