Custom, Excise & Service Tax Tribunal
M/S.Kisan Irrigations & ... vs Cce & St, Indore on 5 July, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:29.06.2016
Date of Decision:5.7.2016
Excise Appeal No.E/51167/2016-EX(SM)
[Arising out of Order-in-Appeal No.BHO-EXCUS-001-APP-158-15-16 dated 29.01.2016 passed by the Commissioner (Appeals-I), Customs & Central Excise & Service Tax, Bhopal (M.P.)]
For Approval and Signature:
Honble Shri B. Ravichandran, Member (Technical)
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
M/s.Kisan Irrigations & Infrastructure Ltd. Appellants
Vs.
CCE & ST, Indore Respondent
Appearance:
Rep. by Shri M. Chauhan, C.A. for the appellant.
Rep. by Shri S. Nunthuk, AR for the respondent.
Coram: Honble Shri B. Ravichandran, Member (Technical) Final Order No.52360/2016 Dated:5.7.2016 Per B. Ravichandran:
The appellant filed a refund claim of Rs.3,88,429/- on 24.3.2014 in consequence of a favourable order by Commissioner (Appeals). The said claim was processed and duly sanctioned by the jurisdictional Asstt. Commissioner vide his order dated 13.06.2014. However, after sanctioning refund, he ordered appropriation of the said amount against confirmed demand pending against the appellant consequent upon the order dated 20.12.2013 of Addl. Commissioner. The appellant challenged the said appropriation and the Commissioner (Appeals) vide the impugned order dated 1.2.2016 upheld the original order and rejected the appellants appeal. Aggrieved by this, the appellant is in appeal.
2. Ld. Consultant submitted that the appropriation order was passed without any notice to the appellant during the pendency of the appeal against the confirmation of demand. In fact, when the appellant went on appeal against the appropriation order, the very same Commissioner (Appeals), with whom the demand order was appealed, has held that the appropriation is correct. The said application along with the appeal was very much pending with the Commissioner (Appeals) at the time of appropriation order by the Original Authority. In fact, the long delay in disposal of stay/appeal pending with the Commissioner (Appeals) is not attributable to the appellant. The appeal filed in Feb., 2014 was decided only in Feb.2016. There was no decision on the stay application during this period. He contended that coercive action of recovery ordered by the Original Authority by such adjustment of refund is contrary to the principles of natural justice and legal provisions of Section 11. He further submitted that against the order of Commissioner (Appeals) upholding the original demand, the appellants have already filed appeal with the Tribunal with the mandatory pre-deposit of 7.5% . After amendment of the provisions of Section 35 F, no coercive measures for recovery of balance amount i.e. amount in excess of 7.5% deposited by the appellants is legally tenable. This has been clarified by the Boards Circular dated 16.09.2014. As such, he pleaded for payment of refund already sanctioned with interest.
3. Ld. AR reiterated the findings of the lower authorities. He further stated that at the time of appropriation, the appellant did not produce any stay order against the confirmed demand and as such, the original authority has followed the Boards instructions dated 1.1.2013 and ordered such appropriation.
4. Having heard both the sides and on perusal of the appeal records, I find that at the time of appropriation by the Original Authority, the appeal against the confirmed demand was very much pending with the Commissioner (Appeals) along with the prayer for stay. No decision has been taken on the said appeal or stay application for two years and the appeal was decided only on 9.2.2016 confirming the original order. Against such order, the appellant has already filed an appeal with the Tribunal on payment of a pre-deposit of 7.5%. Considering the sequence of these events, it is apparent that the Original Authority acted without following any principles of natural justice by putting the appellant in notice before coercive action of recovery. It is to be noted that the appeal against the confirmed demand along with stay application was pending with the very same Authority, who upheld the correctness of such appropriation without considering the pendency of the appeal by the party against the demand. In any case, presently, the appellants appeal against the demand is pending with the Tribunal and no coercive action could be possible during the pendency of such appeal. However, the appropriation as ordered in June, 2014, during the pendency of the appeal, itself is not justifiable in view of the reasons stated above.
5. The Tribunal in 2009 (247) ELT 512 (Tribunal-Delhi) and Jay Kay Synthetics 2002 (145) ELT 718 (Tribunal-Delhi) held that before appropriation of refund towards any arrears due, show cause notice/personal hearing is required. In the present case, I find the appellants were not even issued a simple intimation regarding proposed appropriation. Further, the Tribunal in Voltas Ltd. 2008 (9) STR 591 examined the scope of applicability of Section 11 to recover the sums due to Government. It was held that only after finality of the appeal proceedings, the dues become arrears. In the present case, the appeal is pending before the Tribunal as per the amended provisions of Section 35 F on payment of mandatory pre-deposit. The amount in excess of such pre-deposit cannot be collected coercively.
6. Considering the above discussions and analysis, I find the impugned order is not justifiable and accordingly set aside the same. The appellant is eligible for refund of full amount as originally decided by the jurisdictional Asstt. Commissioner with applicable interest , if any. The appeal is allowed accordingly.
[ Order pronounced on 5.7.2016.] ( B. Ravichandran ) Member (Technical) Ckp.
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