No Indirect recovery of tax during pendency of stay

The Central Board of Excise &Customs (“CBEC”) has vide a circular dated 4th July, 2016 directed that recovery proceedings in relation to an order of the High Court or Tribunal of a confirmed demand may be initiated only after a period of 60 days from the date of order of Hon’ble Tribunal or the Hon’ble High Court, as the case may be, where no stay has been granted by Hon’ble High Court or Hon’ble Supreme Court against the order of Hon’ble Tribunal or Hon’ble High Court. Further in case there is a stay application pending before the Commissioner (Appeals) or CESTAT for periods prior to 6th August 2014, no recovery shall be made during the pendency of the stay application. The circular would also be useful in making a uniform practice regarding the recovery of confirmed demands of indirect taxes. It may be noted that a confirmed demand for tax arises when, after the inspection of the submissions of taxpayers, an order is issued by the CBEC to pay the remaining tax.

Appropriate amendments have been made to Section 129E of the Customs Act, 1962 and Section 35F of the Central Excise Act, 1944. The said circular was issued to ensure that the assessee gets enough opportunity to appeal before the commencement of recovery proceedings in indirect taxes.

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