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Larsen and Toubro Limited Versus The Union of India & Others

2016 (4) TMI 781 - BOMBAY HIGH COURT

Refund - Adjustment of demand where stay was granted by the tribunal - Held that:- the Revenue could not have got over a binding stay order and by indirect or oblique process seek to recover the very sum and amount which it could not recover because of the prohibitory order of the Tribunal. Once no recovery of taxes pending Appeal was permissible and there was a stay to that extent, then, the Revenue could not have ignored this binding order of the Tribunal. - Once no recovery of taxes pending A .....

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d to nullify, therefore, an order of stay which binds the Revenue. The powers if at all available could not have been exercised in this case and to subvert the order of stay and the Appeal which is pending, as a whole. This novel way of adjudication and mid-way during the pendency of legal proceedings before higher forum enables us to interfere in our writ jurisdiction. Therefore, the impugned order is quashed and set aside. Decided in favour of petitioner - Writ Petition No. 2099 of 2016 - Date .....

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d which is stayed by the Appellate Tribunal be set aside. 2. Very few facts are necessary to appreciate the arguments of the Petitioners' counsel. The Petitioners, inter alia, export various engineering equipments and machinery. They cleared excisable goods for export on payment of duty of ₹ 1,58,20,843/- on 13th February 2015 and then claimed the rebate. An order-in-original was passed on 25th May 2012 denying the credit of service tax paid on input service to the extent of ₹ 2, .....

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30, the Tribunal waived the condition of pre-deposit and stayed the recovery of taxes during the pendency of the Appeal. That was done in the exercise of inherent powers of the Tribunal and later on that order came to be confirmed. 6. What we have found thereafter is that the 3rd Respondent on 17th September 2015 sanctioned the claim of rebate of duty which was paid by the Petitioners on the goods exported as above to the extent of ₹ 1,49,43,056/- in cash and ₹ 8,77,787/- by way of c .....

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dent No. 3 was set aside by this Court and the Respondent No. 3 was directed to comply with the Rule of law, namely, issue a notice and hear the Petitioners at a personal hearing. 8. Subsequent thereto and in compliance of this Court's order, the Respondent No. 3 made the impugned order dated 19th January 2016. 9. Mr. Shah appearing on behalf of the Petitioners would submit that the impugned order is ex facie without jurisdiction, arbitrary and untenable in law. 10. The Assistant Commissione .....

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3 could not have been given effect to the order in original in an indirect manner. Now, the very order which was passed earlier and which is under challenge is enforced by a back door or indirect method. In such circumstances, all the legal rights of the Petitioners now are in jeopardy. 11. After such a complaint was made by Mr. Shah for the Petitioners and a compilation was handed over, what Mr. Jetly initially sought was an adjournment to take instructions, but he stated that he would be able .....

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recovery. What the Revenue is seeking to exercise is its power of adjusting the amount which is due, viz., rebate claim of the assessee against the amount payable to the Revenue by the assessee and this was a permissible exercise. 14. Mr. Jetly would submit, therefore, that the Petition be dismissed. 15. After giving our anxious consideration to the contentions of both sides and perusing the Petition, the annexures thereto and the judgment of this Court rendered in the above matter, we are not i .....

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mand of ₹ 53,53,452/-. That is how the Petitioner/ assessee approached the Tribunal and they filed applications for dispensation of the condition of pre-deposit and stay. The Tribunal disposed of those applications and passed an order of dispensation. 17. An extension of the stay continued but by three orders the Assistant Commissioner sanctioned the claim of refund. While sanctioning the rebate claim of the Petitioners before this Court, the Assistant Commissioner directed appropriation a .....

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ision reads as under:- 6. In the present case, the revenue is not seeking to initiate recovery proceeding on the expiry of a stay. In this case, the revenue is seeking to exercise its power under Section 11 of the Act by adjusting the amount which is due (rebate claim) to the petitioner from the revenue against the amount payable by the petitioner to revenue as a consequence of the order dated 31 July, 2006. It is to be noted that the so called stay which was granted to the petitioner on 15 Dece .....

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would not estop the revenue from adjusting amounts which become subsequently due to the petitioner towards the amount payable by the petitioner to the department. Besides, introduction of the third proviso to sub-section (2A) of Section 35C of the Act introduced in 2013 would appear to dilute the applicability of the decision relied upon by the petitioner. However, it must be pointed out that a Division Bench of this Court in CIT v. Ronuk Industries Ltd. - (2011) 333 ITR 99 while dealing with a .....

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he facts and circumstances of each case and the nature of the power exercised by the Revenue. 20. Before us the Revenue had passed an original order. That confirmed a certain demand. That order was challenged in Appeal before the Tribunal and to the extent the Petitioner disputed the demand, there was a stay in favour of the Petitioner before us, as also the condition of pre-deposit was waived. Such an order passed in the presence of both sides including the Revenue could have been assailed by t .....

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