25th May, 2004
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Subject:- Central Excise-Coercive action for the recovery of arrears when the appeal/stay application is pending in Tribunal -reg.
I am directed to refer to Board’s Circular No. 396/29/1998-CX dated 2nd June, 1998 on the subject of taking recourse to coercive measures to recover duty demanded as a result of adjudication till such time as the stay applications have been disposed of by Commissioner (Appeals). Consequently, references have been received regarding the course of action to be taken when the stay application against the Order-in-Original passed by Commissioner is pending with the Tribunal.
2. The matter has been examined. The Board has taken the following decisions:
For cases where the appeals lie with the Commissioner (Appeals) and no stay application is filed along with the appeal, recovery proceedings may be initiated after 60 days from the date of communication of the order. In respect of Orders-In -Original of Commissioners where the first appeal lies with the Tribunal and no stay application is filed along with the appeal, the aforesaid time period would be 90 days.
Where conditional stay orders are issued specifying the time limit for fulfillment of the conditions but conditions are not fulfilled as per the directions of the Tribunal or Commissioner (Appeals), as the case may be, recovery proceedings should be initiated immediately after the lapse of the time period prescribed in the appellate stay order for fulfillment of the conditions.
In respect of stay applications pending against the Orders-In Original of the Commissioners before the CESTAT a view similar to Board ‘s Circular No.396/29/98-CX dated 2.6.1998 should be taken. The two provisos to Section 35C(2A) of the Central excise Act, 1944 read as follows:
“Provided that where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 35B,the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order:
Provided further that if such appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated.”.
In view of the above stated legal position, the field officers should refrain from taking coercive action till the period of six months of filing a stay petition before the CESTAT, or till the disposal of the stay petition, whichever is earlier.
The instructions in this clause relate to only stay application filed with first stage appeals not to those with further appeals i.e. only in respect of stay applications filed with appeals filed against the Orders-In Original of the Commissioners.
3. Receipt of the Circular may be acknowledged.
4. Hindi version will follow.
Neerav Kumar Mallick
Under Secretary to the Govt. of India