Abdullabhai Abdul Kader vs Union of India

Though an appeal against an order of adjudication as well as a stay application is pending before the Commissioner of Central Excise (Appeals), a recovery notice has been issued on 21 January 2013 demanding the service tax, penalty and interest relying on a circular of Central Board of Central Excise and Customs dated 1, January 2013. The circular dated 1 January 2013 has been dealt with in a judgment of the Division Bench of this Court in Larsen and Toubro Limited Vs. The Union of India and Others, . This Court has held as follows: 17. For these reasons, we have come to the conclusion that the provisions contained in the impugned circular dated 1 January 2013 mandating the initiation of recovery proceedings thirty days after the filing of an appeal, if no stay is granted, cannot be applied to an assessee who has filed an application for stay, which has remained pending for reasons beyond the control of the assessee. Where, however, an application for stay has remained pending for more than a reasonable period, for reasons having a bearing on the default or the improper conduct of an assessee, recovery proceedings can well be initiated as explained in the earlier part of the judgment.

In this view of the matter, we direct that the Commissioner of Central Excise (Appeals) shall dispose of the stay application within a period of four weeks of the date on which an authenticated copy of this order is produced before him and until orders are passed on the stay application, no coercive steps shall be taken in pursuance of the impugned notice dated 19 January 2013. We clarify that the law laid down by this Court in Larsen & Toubro Limited (supra) shall bind all Commissioners of Central Excise, Service Tax and Customs. The respective controlling authorities within the State shall now issue necessary directions to ensure that the judgment of this Court is duly observed. We are constrained to make these observations since despite the judgment of this Court, petitions have been filed repeatedly complaining of the action of the Revenue in taking coercive steps for the recovery of the dues without disposal of stay applications and without any inaction or delay on the part of the assessee.

The petition stands disposed of. There shall be no order as costs.