BIFR registration triggers statutory protection, staying recovery proceedings and supporting waiver of deposit for duty and penalties.

Once a reference by an industrial company is registered before the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985, the inquiry is treated as commenced and Section 22 protection operates to keep recovery action against the company's assets in abeyance until the BIFR reaches a final decision. On that basis, recovery proceedings for the demanded duty and penalties were not to continue, and waiver of deposit was granted with recovery stayed.

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Issues: Whether the assessee, having filed and got registered a reference before the BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985, was entitled to the benefit of suspension of recovery proceedings and waiver of deposit of the duty and penalties demanded under the impugned orders.

Analysis: Once the reference under the Sick Industrial Companies (Special Provisions) Act, 1985 is registered, the inquiry is treated as having commenced and the protection under Section 22 operates to keep action against the company's assets in abeyance until the BIFR takes a final decision. The Tribunal accepted the admitted position that the assessees had approached the BIFR and that the reference stood registered, and therefore considered recovery proceedings against them as not fit to continue at that stage.

Conclusion: The assessee was entitled to waiver of payment of the duty and penalties and recovery thereof was stayed.

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