No Recovery shall be made During the Pendency of the Stay Application; CBEC [Read Circular]

CBEC - Standing - Counsel - Taxscan

The Central Board of Excise and Customs, has invalidated recently issued Circular regarding recovery of confirmed demands during the pendency of stay application following the judgments of various High Courts.

Earlier, the Board has issued a Circular No. 967/1/2013-CX dated 01.01.2013, on the issue of recovery of confirmed demands during the pendency of stay application filed by the assessee. The said Circular was challenged before the High Courts. The High Court of Punjab & Haryana, in M/s PML Industries Ltd’s case, has opined that the right of consideration in appeal on an application of waiver of pre-deposit is a right conferred by the Statute, and therefore, such right cannot be defeated on the basis of Circular. This view as later confirmed by the Supreme Court on appeal.

On this basis, the Government vide the present Circular has clarified that the Circular dated 01.01.2013 along with the connected circular will remain as rescinded.

Vide Circular No. 1035/23/2016-CX dated 01.04.2016 no recovery shall be made during the pendency of the stay application in cases where such applications are pending before the Commissioner (Appeals) or CESTAT. However, this is applicable to cases pending before the above authorities for the period prior to 06.08.2014.

The Central Government, as a measure of liberalization and to ensure uniformity of practice, has further directed that the recovery proceedings in connection with any order of the High Court or Tribunal shall be initiated after 60 days from the date of such order when no stay has been ordered by the Supreme Court or High Court in respect of the above orders.

Read the full text of the circular below.