Sr. No. 10 of the circular of the Board deals with an appeal to the CESTAT where the Commissioner (Appeals) has confirmed a demand in an order in original of the adjudicating authority. The circular stipulates that recovery has to be initiated immediately on the issue of the order in appeal. In a situation where the Commissioner (Appeals) has confirmed the demand made in the order of adjudication, the assessee is permitted by the provisions of Section 35F to move the Tribunal for a dispensation of the requirement of deposit. But the circular mandates that recovery shall be made immediately on the issue of an order in appeal implying thereby that recovery would be initiated without allowing the assessee, the time which is allowed by the statute for filing an appeal and for applying for a waiver of pre-deposit. Similarly, Sr. No.11 stipulates that where the Tribunal has confirmed the demand, a recovery would be initiated immediately on the issuance of the order of the Tribunal. The assessee is therefore deprived of even a reasonable period of time to move the High Court against the order of the Tribunal. In our view, the circular which is issued by the Board is in terrorem and its plain effect and consequence is to deprive the assessee of the remedy which is provided under the law of moving, as the case may be, the CESTAT, the High Court or the Supreme Court against an order of adjudication of the competent appellate forum. Initiating recovery proceedings because a stay application has not been disposed of within thirty days of the filing of an appeal would be to penalize an assessee for the inability of the judicial or, as the case may be, quasi-judicial authority to conclude the disposal of the stay application within that period. If the assessee is not responsible for the delay in the disposal of the stay application and the application remains pending for reasons not attributable to the conduct of the assessee, initiation of recovery proceedings would be arbitrary and unfair. However, if the failure to dispose of an application for stay is because of the conduct of the assessee, such as by a resort to dilatory tactics, the revenue would in such a situation be justified in commencing recovery action. Moreover, there is no justification to commence recovery immediately following an order in appeal where a period of limitation is laid down by the relevant provision of law for challenging the decision of the Appellate Authority.
Counsel appearing on behalf of the Revenue submitted during the course of the hearing that the field officers of the Revenue who initiate recovery action are independent of the adjudicating or appellate forum and hence have no means of verifying the status of the applications for stay and it is hence for the assessee, when recovery action is initiated to inform the jurisdictional Commissioner of the pendency of the stay application. We do not find that this can be treated as a valid justification for penalizing an assessee whose conduct is otherwise free from blame. Modern technology has made rapid strides and in our view, it is time that the Union Ministry of Finance takes steps to ensure that proceedings before the adjudicating authorities as well as the Appellate Authorities including the Commissioner (Appeals) and the CESTAT are recorded in the electronic form. Once an appeal is filed before the Commissioner (Appeals), the filing of the appeal must be recorded through an entry made in the electronic form. Every appellant, including the assessee must indicate, when an appeal is filed, an email ID for service of summons and intimation of dates of hearing. The Commissioner (Appeals) must schedule the hearing of stay applications and provide dates for the hearing of those applications which must be published in the electronic form on the website. The order sheets or roznamas of every case must be duly uploaded on the website to enable both the officers of the Revenue and assessees to have access to the orders that have been passed and to the scheduled dates of hearing. We would also commend to the Union Ministry of Finance the urgent need to introduce electronic software that would ensure that the orders and proceedings of the CESTAT are duly compiled, collated and published in the electronic form. A case information software has been adopted for the District judiciary including in the State of Maharashtra under the auspices of the National Informatics Center.Matters involving Revenue have large financial implications for the Union Government. The incorporation of electronic technology in the functioning of judicial and quasi-judicial authorities constituted under the Central Excise Act, 1944, the Customs Act, 1962 and cognate legislation would provide a measure of transparency and accountability in the functioning of the adjudicating officers, the appellate Commissioners as well as the Tribunal. But equally significant is the need to protect the interest of the Revenue which the adoption of electronic technology would also achieve. We are not unmindful of the fact that an application for stay may be kept pending for an indefinitely long period of time at the behest of an unscrupulous assessee and a willing administrative or quasi-judicial authority. This would be obviated by incorporating the requirement of disseminating and uploading the proceedings of judicial and quasi-judicial authorities under the Central Excise Act 1944 as well as the Customs Act 1962 in an electronic form. This would ensure that a measure of administrative control can be retained with a view to safeguarding the position of the Revenue as well as in ensuring fairness to the assessees. We hope and trust that this suggestion of the Court will receive serious and urgent consideration by the Union Ministry of Finance.
In the lead Writ Petition, the hearing of the application for stay has been adjourned for administrative reasons not bearing upon the conduct of the assessee and the application is now listed on 5 February 2013. In the circumstances, we see no reason or justification for the initiation of recovery proceedings despite the pendency of the stay application before the CESTAT. We would request the CESTAT to take up the stay application for early disposal -and preferably within a period of eight weeks of the date on which an authenticated copy of this order is produced before it. We direct that in the meantime no coercive steps for the recovery of the demand shall be initiated.
HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.878 OF 2013
Larsen & Toubro Limited & Anr Vs.The Union of India and others . .
WITH WRIT PETITION NO.380 OF 201
Uhde India Private Limited Vs.The Union of India and others
WITH WRIT PETITION NO.420 OF 2013
Tata Teleservices (Maharashtra) Ltd. Vs. The Union of India and others
WITH WRIT PETITION NO.696 OF 2013
M/s. Tata Motors Limited Vs. The Union of India and others
WITH WRIT PETITION NO.698 OF 2013
M/s. Bhatia Shipping Pvt. Limited Vs. The Union of India and others . .
WITH WRIT PETITION NO.810 OF 2013
M/s. Tata Steel Limited Vs. Union of India and others
WITH WRIT PETITION NO.811 OF 2013
M/s. Tata Steel Limited Vs. The Union of India and others ..
WITH WRIT PETITION NO.812 OF 2013
M/s. Tata Steel Limited Vs.The Union of India and others
