The CBEC members should have been Historians rather than Economists! No one knows the art of twisting the case in their favour than the Ministry of Finance itself. A three decade old, Import duty case of meager 70 thousand rupees booked by the Mumbai Customs way back in 1983, which interestingly the department lost both in the Tribunal and thereafter in the Apex court, forms the basis of the recent illogical and hard-hitting Circular No. 967/01/2013–CX dated 1-1-2013. The Hon'ble Supreme Court while deciding the case in the assessee's favour, reminded the department that mere filing of an Appeal does not operate as a Stay or suspension of the Order appealed against. After almost 30 years, the CBEC has picked up this line and come out with this insensitive, callous, harsh recovery guideline! Henceforth, this circular will form the governing principle for recovery proceedings to be initiated against a confirmed demand. The Circular gives absolute powers to the officers for recovery of government dues even though one may have appealed against the first or the second order. The situation varies from cases to case a, as the authority changes. The underling fact is that there is a huge short fall in the revenue targets and this years budget is an uphill task for the FM. The only remedy he sees is to go out and out for recovery of all pending dues!
Accordingly where No appeal is filed against a confirmatory order in original (OIO) against which appeal lies with Commissioner (Appeals), recovery will be initiated after expiry of statutory period of 60 days for filing appeal. However in case of an appeal filed before Commissioner(Appeals) without stay application against a confirmatory order in original, the Recovery will be initiated after such an appeal has been filed, without waiting for the statutory 60 days period to be exhausted. Even if the Appeal is filed with a stay application against an order in original (OIO) the department will initiate recovery on completion of 30 days after the filing of appeal, if no stay is granted or after the disposal of stay petition in accordance with the conditions of stay, if any specified, whichever is earlier.
In a situation where No appeal is filed against an Order in Original issued by the Commissioner, the Officers will go for recovery after expiry of statutory period of 90 days for filing appeal from the date of communication of order. In case the CESTAT Appeal is filed without stay application against an Order in Original issued by the Commissioner, the circular states that Recovery to be initiated on filing of such an appeal, without waiting for the statutory 90 days period to be exhausted. However in case of CESTAT Appeal filed with a stay application against an Order in Original issued by the Commissioner as per the new circular recovery is to be initiated, 30 days after the filing of appeal, if no stay is granted or after the disposal of stay petition in accordance with the conditions of stay, if any, whichever is earlier.
However the harshest recovery proceedings are in case you tend to lose before the adjudicating officer as well as before the Commissioner(appeals). In all such cases where Commissioner (Appeals) confirms demand in the Order in original, the board circular directs the officers to initiate the recovery proceedings immediately on the issue of such Order in Appeal. It is pertinent to note that both being the departmental officers are likely to be biased and revenue minded. There are ample chances that they confirm the demand and one may not get justice at these levels. In all such cases, the department will initiate recovery proceedings on issue of the OIA (order in appeal). Out of the total litigations in the Central Excise and Service Tax, majority comprise of the cases which are pending before Assistant Commissioners, Deputy Commissioners or Additional Commissioners, who being revenue officers are bound to be Revenue biased and are likely to confirm the demands. Commissioner Appeals, though being an appellate authority, is none other than a revenue officer and belongs to the same clan. This leaves no scope for the assessee but to approach the Hon CESTAT, which is the only ray of hope. With the new hash recovery laws, the trade will be left with no choice but to knock the doors of the High Court. On one hand the Ministry lays stress on reducing the litigations and simplification of procedures, on the other, comes out with these insensitive guidelines. It only reflects one fact, empty coffers of the government revenue and pressure to cover the upcoming budget deficit!!
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