ASSOCHAM appeals to withdraw CBEC circular
New Delhi, Feb 19 : In a SOS sent to the Union Finance Ministry, ASSOCHAM has demanded urgent withdrawal of the Central Board of Excise and Customs (CBEC) circular giving directions for recovery of confirmed demands under different situations.
The chamber said, "For the assesses who have to live in a situation of adjudicating proceedings, this Circular comes as huge disappointment, especially at a time when government has been talking of transparency and dependability in respect of tax collection".
Recovery proceedings under the Circular certainly could put undue burden on several assesses. The numbers of Writ Petitions filed in various High Courts are indicative of the magnitude of its impact.
Madras, Rajasthan and Andhra Pradesh High Courts have already granted interim stay of recovery of the amount involved, till the appellate authority disposes of the application for stay. It may be noted that all High Courts may take similar view. Therefore, the ASSOCHAM spokesman said this Circular will result in futile litigation, which is waste of time, energy and money at both ends viz; the assesse as well as the government.
The CBEC justifies this Circular based on the observation in Para 6 of Order of the Apex Court in case of Collector of Customs, Bombay V/s. Krishna Sales (P) Ltd [1994(73) E.L.T. 519 (S.C), which says as is well-known, mere filing of an Appeal does not operate as a Stay or suspension of the order appealed against.
The context ASSOCHAM said, in which this decision was rendered by the Apex Court, was for release of goods in a customs case. "Unfortunately the CBEC has taken very simplistic and literal meaning of one contextual statement of the Apex Court to form the basis for this Circular."
It is crucial to note that, the observation of the Apex Court that the mere filing of an appeal does not operate as a stay or suspension of the order appealed against is in the nature of an obiter and this by no means can be construed as a precedent in matters related to recovery of amounts that are covered by pending appeals, said ASSOCHAM.
"It seems that while issuing the Circular the CBEC has overlooked the decision of the Apex Court in case of Commissioner of Cus & Ex, Ahmedabad Vs M/s. Kumar Cotton Mills Pvt. Ltd [2005 (180) ELT 434 (S.C)]. In (Para 6 of) this decision the Apex Court has categorically stated that the assesse cannot be punished for matters which may be completely beyond his control," the chamber said.
"It is emphasized that this decision is rendered in the context of the powers of the Tribunals to grant stay of recovery of tax. This decision is more relevant to recovery proceedings than a decision rendered in the context of release of goods in a customs case, which the CBEC intends to rely upon for the circular," it said.
"This decision of Commissioner of Cus & Ex, Ahmedabad Vs M/s. Kumar Cotton Mills Pvt. Ltd has served as a land mark decision and has been relied upon in several decisions in the Courts and Tribunals," said the apex industry body.