TMI Blog2018 (2) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... uck down paragraph 4.2 of the circular as being contrary to section 142 and, therefore, illegal. In our view, however, the word “shall” must be read as “may”. The validity of the circular is accordingly upheld subject, however, to the word “shall” therein being read as “may”. In the present case, one of the reasons for passing the order is that an appeal had not been filed in the name of one of the proprietary firms. That is irrelevant. These are not firms established under the Partnership Act, 1932, or incorporated under the Companies Act, 1956. They are merely the names in which the petitioner carries on business as the sole proprietor thereof. The name in which the petitioner carries on business is not relevant. Proceedings cannot be filed in such name or names. The petitioner having filed the appeal, therefore, serves the purpose of challenging the demand. The impugned order is quashed and set aside - respondents shall be entitled to encash the bank guarantee. The respondents shall be entitled to retain the amount deposited and the amount recovered under the bank guarantee but subject to the fresh orders and the result of the challenge thereto, if any. Petition dispose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petitioner that he was willing to deposit ₹ 15 lakhs and furnish a bank guarantee for the remaining amount of pre-deposit of ₹ 15 lakhs and that the petitioner had complied with the same. The petition was disposed of by directing the Tribunal to decide the appeal on merits. On account of a difference of opinion between the members of the Tribunal, the matter had been placed before a third Member. The majority held that the officer issuing the notice was not competent and, therefore, set aside the same. The majority also held in the petitioner s favour on merits. Whether the Tribunal could have decided the merits of the matter despite the finding that the officer who issued the show cause notice had no jurisdiction is a different matter. The petitioner having succeeded in the appeal filed an application for refund of the said amount of ₹ 15 lakhs deposited by him pursuant to the order of this Court dated 20.01.2010. The application for refund was by a letter dated 01.10.2016 under cover of which the petitioner also forwarded the proof of having deposited the amount of ₹ 15 lakhs. The petitioner, by a letter dated 05.10.2016, made an application fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Act, 1944 or Section 129E of the Customs Act, 1962. 4.2 No coercive measures for the recovery of balance amount i.e., the amount in excess of 7.5% or 10% deposited in terms of Section 35F of Central Excise Act, 1944 or Section 129E of Customs Act, 1962, shall be taken during the pendency of appeal where the party/assessee shows to the jurisdictional authorities: ( i) proof of payment of stipulated amount as pre-deposit of 7.5%/10%, subject to a limit of ₹ 10 crores, as the case may be; and ( ii) the copy of appeal memo filed with the appellate authority. 4.3 Recovery action, if any, can be initiated only after the disposal of the case by the Commissioner (Appeal)/Tribunal in favour of the Department. For example, if the Tribunal decides a case in favour of the Department, recovery action for the amount over and above the amount deposited under the provisions of Section 35F/129E may be initiated unless the order of the Tribunal is stayed by the High Court/Supreme court. The recovery, in such cases, would include the interest, at the specified rate, from the date duty became payable, till the date of payment. Mr. Bansal, in particular, plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of the district in which such person owns any property or resides or carries on his business and the said Collector on receipt of such certificate shall proceed to recover from such person the amount specified there under as if it were an arrear of land revenue; or ( ii) the proper officer may, on an authorisation by Commissioner of Customs and in accordance with the rules made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus, if any, to such person. Provided that where the person (hereinafter referred to as predecessor), by whom any sum payable under this Act including the amount required to be paid to the credit of the Central Government under section 28B is not paid, transfers or othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agraph 4 of the circular is construed as a total or an absolute bar against the authorities recovering any amount in excess of the amount deposited as required by paragraph 4.2(a), it would lead to the most alarming result, unjust to the revenue in the extreme. For instance, if it can be established that upon filing an appeal and the deposit of the amount as per clause 4 of the circular, the person concerned is attempting to part with all his assets movable or immovable with a view to defeating the recovery by the Government of any amount that may be adjudicated, the authorities would be rendered helpless in protecting the revenue against the same if the circular is read as an absolute bar against taking any coercive measures. In such circumstances, surely, the authorities must be not only held to be entitled but bound to protect the revenue inter-alia by attaching the assets. 11. The officer exercising powers under section 142, however, must, in view of the said circular, consider whether or not an amount in excess of the amount deposited pursuant to paragraph 4.2 of the circular ought to be recovered or deducted. He must take into consideration all the relevant facts in this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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