The Central Government has granted relief to assesses plagued by the recovery methods adopted by the tax authorities vide CBEC Circular No. 1035/23/2016-CX dated July 4, 2016

The Central Board of Excise and Customs ('CBEC') vide Circular No. 1035/23/2016-CX dated July 4, 2016 reviewed its earlier Circular No. 967/1/2013-CX dated January 1, 2013 on the issue of recovery of confirmed demands during the pendency of stay application filed by the assessee. It has been typical of the tax authorities, upon confirmation of demand from the higher authorities to immediately commence recovery procedure against assessees without allowing the full benefit of statutory period prescribed for filing of appeals (along with stay applications).

In an attempt at trade liberalization and non-adversial approach, the CBEC has decided that recovery steps cannot be initiated before expiry of 60 days from the date of order and no recovery can be initiated during the pendency period of stay application. Thus, it is a major relief for assesses to strategize the appeal and obtain stay from the higher authority. The salient features of the circular are as under:-

1. When stay application is pending before Commissioner (Appeals) or CESTAT

The CBEC has accepted the view of Hon'ble High Court of Punjab and Haryana, expressed in the case of M/s PML Industries Ltd. Vs Commissioner of Central Excise [2013-TIOL-201-HC-P&H-CX] as confirmed by Hon'ble Supreme Court vide SLP (Civil) 765/2014, holding that recovery cannot be made during the pendency of the stay application before the notified appellate authority.

The circular thus provides that cases which are pending before Commissioner (Appeals) or CESTAT for periods prior to August 6, 2014, no steps for recovery shall be taken during the pendency of the stay application.

2. When demand is confirmed by Hon'ble CESTAT or Hon'ble High Court & stay is pending before Hon'ble High Court or Hon'ble Supreme Court

It is issued that recovery proceeding in relation to an order of Hon'ble High Court or Tribunal confirming demand of duty, may be initiated only after a period of sixty days from the date of order of the Hon'ble Tribunal or Hon'ble High Court.

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