Coercive recovery barred during pending stay proceedings over disputed excise demand and exemption denial

Where appeals and stay applications are pending before the competent appellate forum, coercive recovery of the disputed excise demand should not be pursued until those proceedings are decided. The court therefore restrained recovery action and granted interim protection against locking the factory premises or attaching plant, machinery, or stock, while directing the appellate forum to dispose of the pending matters expeditiously.

---

---

Issues: Whether coercive recovery could be pursued against the petitioners while their appeals and stay applications were pending before the appellate tribunal, and whether interim protection should be granted pending disposal of those proceedings.

Analysis: The dispute arose from denial of exemption under a beneficial small-scale industry notification and the consequent demand for the balance duty. Since the appeals and stay petitions were already pending before the tribunal, the petitioners could not be compelled to pay the disputed amount immediately through recovery action. The proper course was for the appellate forum to decide the pending appeals and stay matters expeditiously, with the adjudicating authority awaiting those orders rather than initiating coercive steps.

Conclusion: Coercive recovery was restrained until the tribunal disposed of the pending appeals and stay applications, and the petitioners obtained interim protection against locking of the factory premises or attachment of plant, machinery, or stock.

Ratio Decidendi: Where an appeal and stay application are pending before the competent appellate authority, coercive recovery of the disputed excise demand should not be pursued until those proceedings are decided, especially where the dispute concerns a beneficial exemption notification.

---