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2016 (4) TMI 781 - BOMBAY HIGH COURT

2016 (4) TMI 781 - BOMBAY HIGH COURT - 2016 (334) E.L.T. 635 (Bom.) - 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 thi .....

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sed in the present Petition and the observations cannot be utilized and 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. D .....

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t that it purports to appropriate part of the rebate against the demand 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 c .....

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5. In the initial order passed on 22nd October 2012, which is at page 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 exte .....

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later on by an order passed on 19th November 2015, the order of Respondent 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 juris .....

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and which Appeal is pending. Having been aware of that Respondent No. 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 .....

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primary objection. Mr. Jetly would submit that appropriation is not a 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 .....

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was adjudicated. The Central Excise Commissioner confirmed the duty demand 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 .....

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under Section 11 and by making an adjustment. Paragraph 6 of this decision 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 .....

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restrain the revenue from taking any coercive action for recovery but 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 .....

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application or dehors the factual conspectus. It would all depend on the 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 pres .....

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