2013 Supreme(Mad) 1467

High Court of Judicature at Madras
R. SUDHAKAR, J.
Givaudan India Pvt. Ltd.
Versus
The Union of India, rep. by the Revenue Secretary Ministry of Finance & Others
W.P. Nos. 1320, 1321, 1508, 1509, 1510, 1530, 1549, 1550, 1562, 1573, 1592, 1594, 1731 to 1736, 1782, 1783, 1841, 1842, 1876, 1877, 1890, 1938, 2134, 2135, 2159, 2430 to 2437, 2640 of 2013 & M.P. Nos. 1 of 2013 (34 Petitions), 2 of 2013 (19 Petitions) & 3 of 2013 (1 Petition)
Decided on: 02-04-2013

Headnote:

CENTRAL EXCISE - RECOVERY OF CONFIRMED DEMAND DURING PENDENCY OF STAY APPLICATION - CIRCULAR NO.967/01/2013-CX, DATED 1.1.2013 ISSUED BY THE CENTRAL BOARD OF EXCISE AND CUSTOMS - VALIDITY - CIRCULAR CLARIFIED - CIRCULAR/INSTRUCTION IS NOT MANDATORY BUT DIRECTORY IN NATURE - CIRCULAR/INSTRUCTION CANNOT OVERRIDE THE PROVISIONS OF THE STATUTE - CIRCULAR/INSTRUCTION CANNOT BE USED TO DEFEAT THE OBJECT OF SECTION 35-F OF THE CENTRAL EXCISE ACT AND SECTION 129-E OF THE CUSTOMS ACT - CIRCULAR/INSTRUCTION CANNOT BE USED TO WHITTLE DOWN THE SUBSTANTIAL RIGHT GRANTED UNDER THE STATUTE TO THE ASSESSEE - CIRCULAR/INSTRUCTION CANNOT BE USED TO TAKE AWAY THE RIGHT OF THE ASSESSEE TO SEEK WAIVER OR STAY BEFORE A QUASI-JUDICIAL FORUM - CIRCULAR/INSTRUCTION CANNOT BE USED TO INITIATE RECOVERY PROCEEDINGS AUTOMATICALLY AFTER EXPIRY OF THE PERIOD SPECIFIED - CIRCULAR/INSTRUCTION SHOULD BE INTERPRETED IN SUCH A MANNER THAT IT SHOULD NOT CAUSE HARDSHIP TO THE GENUINE ASSESSEE, WHO HAS FILED APPEAL ALONG WITH STAY/WAIVER APPLICATION - CIRCULAR/INSTRUCTION CLARIFIED TO STATE THAT WHILE THERE IS A POWER TO INITIATE RECOVERY PROCEEDINGS ON AN ERRING ASSESSEE, THE DEPARTMENT SHOULD REFRAIN FROM TAKING COERCIVE STEPS IF DUE DILIGENCE IS SHOWN BY THE ASSESSEE IN PROSECUTING THE APPEAL AND THE STAY/WAIVER APPLICATION - AUTHORITIES DIRECTED TO TAKE UP THE WAIVER/STAY APPLICATIONS AT AN EARLY DATE AND DISPOSE OF THE SAME PREFERABLY WITHIN EIGHT WEEKS FROM THE DATE OF RECEIPT OF A COPY OF THIS ORDER, IF NOT ALREADY DISPOSED OF - TILL THE DISPOSAL OF THE STAY/WAIVER APPLICATIONS AS INDICATED ABOVE, THE RESPONDENT/DEPARTMENT SHALL NOT TAKE COERCIVE STEPS FOR RECOVERY.

Fact of the Case:

The writ petitions were filed challenging the Circular No.967/01/2013-CX, dated 1.1.2013 issued by the Central Board of Excise and Customs. The circular prescribes certain parameters and directions regarding the manner in which recovery of duty, penalty, etc. in pending proceedings or where no appeal is filed against final order on adjudication in different fora.

Finding of the Court:

The Court held that the circular/instruction is not mandatory but directory in nature and cannot override the provisions of the statute. The circular/instruction cannot be used to defeat the object of Section 35-F of the Central Excise Act and Section 129-E of the Customs Act. The circular/instruction cannot be used to whittle down the substantial right granted under the statute to the assessee. The circular/instruction cannot be used to take away the right of the assessee to seek waiver or stay before a quasi-judicial forum. The circular/instruction cannot be used to initiate recovery proceedings automatically after expiry of the period specified. The circular/instruction should be interpreted in such a manner that it should not cause hardship to the genuine assessee, who has filed appeal along with stay/waiver application.

Issues: Whether the Circular No.967/01/2013-CX, dated 1.1.2013 issued by the Central Board of Excise and Customs is valid.

Ratio Decidendi: The circular/instruction is not mandatory but directory in nature and cannot override the provisions of the statute. The circular/instruction cannot be used to defeat the object of Section 35-F of the Central Excise Act and Section 129-E of the Customs Act. The circular/instruction cannot be used to whittle down the substantial right granted under the statute to the assessee. The circular/instruction cannot be used to take away the right of the assessee to seek waiver or stay before a quasi-judicial forum. The circular/instruction cannot be used to initiate recovery proceedings automatically after expiry of the period specified. The circular/instruction should be interpreted in such a manner that it should not cause hardship to the genuine assessee, who has filed appeal along with stay/waiver application.

Final Decision: The writ petitions were disposed of in the above terms. No costs. Consequently, the connected miscellaneous petitions were closed.