Skip to main content

CBEC Clarification on Recovery of Demands

CBEC Clarification reg. Recovery of Confirmed Demands during the pendency of Stay Application

To bring uniformity in practice and to ensure that the assessee gets adequate opportunity to appeal before recovery proceedings are started in recovery of confirmed demands of indirect taxes, the CBEC has issued Clarification Circular No. 1035/23/2016-CX dt. 4th July, 2016, on the following lines:
In cases where stay application is pending before Commissioner (Appeals) or CESTAT for periods prior to 06.08.2014, no recovery shall be made during the pendency of the stay application. It may be noted that the law on the issue was amended on 06.08.2014, where after filing of appeal requires payment of 7.5 or 10 per cent of tax demand, depending on stage of appeal, obviating the need for appellate authority to hear any stay application.
However in the cases where demand is confirmed by Hon'ble CESTAT or Hon'ble High Court recovery proceeding may be initiated after a period of sixty days from the date of the order provided that no stay is in operation.
CBEC Circular No. 1035/23/2016-CX dt. 4th July, 2016
1. Kind attention is invited to Board 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. Since then important changes in Law have been made and important judgments have come on the subject. Accordingly, it has been decided to review the Circular.
Part I: When stay application is pending before Commissioner (Appeals) or CESTAT :
2. The circular dated 01.01,20.13 was examined by Hon'ble High Courts in situations where stay applications was pending before Commissioner (Appeals) or CESTAT. In this regard some of the important judgments are L&T vs. UOI (2013-TIOL-99-HC-CX) and Karnavati Club ltd. Vs. UOI (SCA No 2422/2013), wherein the Courts held that recovery could be made only in cases where delay in deciding the stay could be attributed to the conduct of the assessee. No appeal was filed against these judgments of the Hon'ble High Courts by the Department and thus these judgments attained finality.
3.1 However Hon'ble High Court of Punjab and Haryana judgment in case of M/s PML industries Ltd. Vs Commissioner of Central Excise (2013-TIOL-201-HC-P&H-CX) pronounced that during the pendency of stay, irrespective of the conduct of the assessee, no recovery could be made. In para 46, Hon'ble Court observed that:
"…we are of the opinion that right of consideration in appeal on an application for waiver of pre-deposit is a right conferred by the Statute and such right cannot be defeated on the basis of Circular…"
3,2 SLP filed by the Department [SLP (Civil) 765/2014] against the judgment of Hon'ble High Court of Punjab and Haryana, has been dismissed by the Hon'ble Supreme Court, thus upholding the decision of the Hon'ble High Court, The relevant observation of the Hon'ble Supreme Court while dismissing the SLP, is reproduced below:-
"In view of the judgment and order passed by this Court in Commissioner of Customs & Central Excise, Ahmedabad vs. Kumar Cotton Mills Pvt. Ltd [2005 (180) ELT 434 (SC)/2005-TIOL-42-SC-CX) we find no reason to interfere with the impugned order passed by the High Court. The special leave petitions are dismissed."
4.1 In light of the above judgments, the Circular No. 967/1/2013-CX dt. 01.01.2013 is hereby rescinded and following fresh instructions are given on the subject. It is also clarified that seven circulars which had been rescinded vide Circular No, 967/1/2013-CX dated 01.01.2013 shall continue to remain rescinded.
4.2 In cases where stay application is pending before Commissioner (Appeals) or CESTAT for periods prior to 06.08.2014, no recovery shall be made during the pendency of the stay application.
4.3 For subsequent period i.e. from 06.08.2014 onwards, instructions contained in Circular No. 984/08/2014-CX dated 16.09.2014 shall continue to be followed. Section 129E of the Customs Act, 1962 and Section 35F of the Central Excise Act, 1944, as made applicable to Service Tax vide Section 83 of the Finance Act, 1994, was amended vide Finance Act, 2014 with effect from 06.08.2014.
Part II: When demand is confirmed by Hon'ble CESTAT or Hon'ble High Court & stay is pending before Hon'ble High Court or Hon'ble Supreme Court:
5.1 Attention is invited Sl. No. 11 of the Circular No. 967/1 /2013-CX dated 01.01.2013 providing that when a demand is confirmed by a Hon'ble CESTAT or a Hon'ble High Court, recovery may be initiated immediately on the issue of order by the Hon'ble Tribunal or the High Court, if no stay is in operation. Hon'ble High Court of Gujarat in case of Karnavati Club Ltd. (SCA No. 2422/2013) examined the entire Circular dated 01.01.2013 and in relation to Sl. No 11, in para 29 of the judgment, upheld the direction contained in the circular, without any modification.
5.2 As a measure of liberalization and to ensure uniformity of practice, it is hereby directed that, recovery proceeding in relation to an order of Hon'ble High Court or Tribunal confirming demand of duty, may be initiated only after a period of sixty days from the date of Order of the Hon'ble Tribunal or Hon'ble High Court, as the case may be, where no stay has been granted by Hon'ble High Court or Hon'ble Supreme Court against the order of Hon'ble Tribunal or Hon'ble High Court, respectively.

Comments

Popular posts from this blog

INSPECTION MANUAL OF STOCK, BOOK DEBTS & SECURITIES

CONTENTS SR. NO. CHAPTER PAGE NO. INTRODUCTION STOCK & RECEIVABLES AUDIT VERIFICATION OF STOCK & DEBTORS PROCEDURE OF STOCK AUDIT VERIFICATION OF SECURITIES ANALYTICAL REVIEW INTERNAL CONTROL QUESTIONNAIRE STOCK b) BOOK DEBTS LIST OF DOCUMENTS TAKEN AS WORKING PAPERS SPECIMEN INSPECTION REPORT SPECIMEN MANAGEMENT REPRESENTATION LETTER CHAPTER 1 INTRODUCTION: Banking is an important sector of the economy of any country and for the development of the economy a healthy banking system is a must. After the liberalization of the economy, the banking system has undergone a total change in India. There is hard competition in the banking industry to survive in the current circumstances. With the purpose to have better financial discipline & to ensure uniformity in accounting norms RBI introduced the concept of assetclassification & income recognition as per the recommendations of Narasimhan Committee. It was also suggested to classify the advances given by banks into Performing & Non Perfor…

Excel Add-in to convert amount in figures to words by Premal

Gentlemen:
AmtInWords.xla is attached to this mail. It is an MS Excel Add-in written by me to convert amount available in figures to words.
Installation
Copy the attached file to the folder where excel stores the add-ins. (To know where excel stores the add-ins, open any workbook, click on Tools - Add-ins - Browse)
Then open an excel workbook. Click on Tools - Add-ins - Browse - Give the path to this Addin - Ok
Usage
You can use the functions AmtInWords and AmtInWordsUS in any worksheet. The syntax is:
=AmtInWords(decimal number/cell reference, [currency code])
=AmtInWordsUS(decimal number/cell reference, [currency code])
Examples follow:
=AmtInWords(10000000)
=AmtInWords(123456.77)
=AmtInWords(C4)
=AmtInWordsUS(B3) ' Shall give the amount in millions (US format)
=AmtInWordsUS(B3,"USD") ' Shall give the amount in millions (US format) and in US currency (Dollars)
=AmtInWords(C4,"GBP") ' Shall give the amount in lakhs and in UK currency (Pounds)
Notes
The system shall N…

A Complete Guide to sections 54 & 54F Exemptions - T.V. GANESAN CS

A Complete Guide to sections 54 & 54F Exemptions T.V. GANESAN CS If an individual transfers any long-term capital asset and plans to reinvest the sale proceeds in a new residential house property then he would be eligible to claim exemption under sections 54 and 54F of the Income-tax Act, 1961 subject to fulfilment of certain conditions. In the last couple of years there has been a phenomenal increase in the sale of properties resulting in capital gain including but not limited to the land owners giving the land to the developers and entering into Joint Development Agreement, receiving more than one flat from the builder and yet avoiding capital gains tax. In this article the author has enumerated various decisions and judgments of the Tribunals and the High Courts which have liberally interpreted the provisions of the Income-tax Act and extended the capital gains exemptions to the assessees. Introduction 1. Out of the various investment options available, investment in real estate …