Interim stay on coercive recovery can protect a public sector unit while committee clearance remains pending.

Interim stay against coercive recovery from a public sector unit may be granted where clearance from the competent committee is still pending. The Tribunal relied on its inherent powers under Rule 41 and the cited Chennai Bench ruling to restrain recovery action during the pendency of such approval. It also noted that the Board circular supported restraint on recovery until committee clearance is obtained. The practical effect is that Revenue recovery steps may be stayed against a public sector unit while the clearance process remains incomplete.

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Issues: Whether interim stay against recovery could be granted to a public sector unit pending clearance by the competent committee.

Analysis: The Tribunal noted that the department was seeking to recover the demanded amount while clearance was still pending. Relying on the cited Chennai Bench ruling, it held that it possessed inherent powers under Rule 41 to grant interim stay where coercive recovery steps were being taken against a public sector unit. The Board circular also supported restraint on recovery pending committee clearance.

Conclusion: Interim stay against recovery was granted and the Revenue was restrained from recovering the amount.

Ratio Decidendi: The Tribunal may exercise its inherent powers to grant interim stay against coercive recovery from a public sector unit pending clearance by the competent committee.

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