Ms Kanishk Enterprises Represented By Propriter Sri Kumar Pashupati Singh vs. Union Of INDIA Through The Secretary Ministry Of Finance Deptt Of Revenue

Held

The High Court noted that the Revenue, in its counter affidavit, had stated that they would not proceed further with the recovery proceedings under Section 87 of the Finance Act after being informed that the assessee had filed an appeal before the Commissioner (Appeals). This statement rendered the writ application infructuous. The Court also observed that the reliefs sought by the petitioner could be pursued before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, where the appeal was already pending. Therefore, the Court disposed of the writ application with these observations, implying that the Revenue's undertaking to halt further proceedings was sufficient to address the immediate concern raised by the petitioner, and any further relief should be sought from the appellate tribunal.

Facts

M/s Kanishk Enterprises (the appellant) filed a writ petition before the High Court of Jharkhand at Ranchi seeking a direction to stay recovery proceedings initiated under Section 87 of the Finance Act. The appellant contended that the Department's Circular dated 16.09.2014 stipulated that no coercive measures for recovery of amounts exceeding 7.5% or 10% deposited under Section 35(F) of the Central Excise Act, 1994, or Section 129(E) of the Customs Act, should be taken during the pendency of an appeal. The appellant had filed an appeal before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, after their appeal before the Appellate Authority was dismissed, and had deposited 10% of the assessed amount. The Revenue, in its counter affidavit, acknowledged issuing a notice under Section 87 of the Finance Act but stated they would not proceed further upon learning of the appeal filed before the Commissioner (Appeals).

Key Issues

1. Whether the initiation of recovery proceedings under Section 87 of the Finance Act is permissible when an appeal is pending before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) and the appellant has deposited 10% of the assessed amount, in light of the Department's Circular dated 16.09.2014? (Question of law) The appellant argued that the Department's Circular dated 16.09.2014 mandates a stay on coercive recovery measures for amounts exceeding the prescribed deposit (10% in this case) during the pendency of an appeal. They relied on this circular to seek a stay on the Section 87 proceedings. The Revenue, in its counter affidavit, stated that while a notice under Section 87 of the Finance Act was issued, they would not proceed further once they were aware that the assessee had filed an appeal before the Commissioner (Appeals).