Customs, Excise and Gold Tribunal - Bangalore
The Executive Engineer, Kerala State ... vs The Commissioner Of Central Excise, ... on 30 October, 2001
Equivalent citations: 2002(139)ELT364(TRI-BANG)
JUDGMENT S.S. Sekhon, J.
1. Heard both sides. The present appeal is against the order of Commissioner (Appeals) who found:-
"The appellants in the grounds of appeal and at the time of personal hearing contended that the order of the Assistant Commissioner is to correct and proper since they had already filed appeals along with the stay application before the Hon'ble Tribunal against the earlier orders on confirmation of demands which were pending decision. At the time of personal hearing, they further pleaded that subsequent to the order no the Assistant Commissioner No. 14/97 dated 21.1.97, stay orders have been passed by the Tribunal in their order dated 21.7.97 and 3.12.97 respectively. Accordingly, the order of the Assistant Commissioner adjusting the refund amount of Rs. 81,491,/- (Eighty one thousand four hundred and ninety one) towards part recovery of earlier demands is not correct and proper and therefore should be set aside.
I have carefully examined the facts of the case and the findings in the subject adjudication order. I do to find any infirmity in the subject order of the Assistant Commissioner ordering a refund of Rs. 81,491/- (Eighty one thousand four hundred and ninety one) sanctioned to be adjusted against the central excise duty due form the appellant confirmed in the earlier orders. On the relevant date, when the subject adjudication order was passed, there was no stay of the recovered amount of the earlier confirmed demands. Accordingly, the Assistant Commissioner has rightly and legally issued the adjustment order which is fully i conformity with the provisions of the law. Therefore, in my considered view, the order of Assistant Commissioner is correct, legal and proper since on the relevant date the earlier demand of confirmation orders were in force and there was no order of stay of recovery of the said demands from the Tribunal. Hence, in my considered view the order does to require any interference.
2. The Assistant Commissioner had in his order come to the following conclusions:-
"I have carefully gone through the refund application of M/s. KSEB, Central Mechanical Division, Pallom, their reply dated 21.12.96 and also the submissions made during the P.H. held on 15.1.97. The Commissioner of Central Excise (Appeals), Cochin in order-in-appeal No. 229/96(C), 230/96(C) dated 28.6.96, has held that Cross Arms and Earth Pipes are not manufactured products to attract duty of excise. The refund claim of M/s KSEB in in respect of the excise duty paid on cross arms. The refund claim is found to satisfy the conditions as per Section 11B of the Central Excise Act, 1944. The total amount of the claim in Rs. 1,99,072/- which was the actual duty paid on Cross Arms during the period 15.7.96 to 1.10.96. As no excise duty is payable on Cross Arms as per the appellant orders cited the assessee is to eligible for Modvat credit on the inputs used in the manufacture of Cross Arms and therefore a sum of Rs. 1,17,581/- equivalent to the modvat already availed is adjustable from the refund amount. Accordingly, refund of Rs. 81,491/- is sanctioned to M/s K.S.E.B as per Section 11B(2) of the Central Excise Act, in the absence of any stay order against Collector(Appeals) order cited.
I further order that the refund amount of Rs. 81,491/- as sanctioned above, be adjusted against the Central Excise duty due from M/s KSEB as per order-in-original No. 31/95 dated 13.3.1995 of Assistant Commissioner, Central Excise, Kottayam, as upheld by order-in-appeal No. 229/96(C), 230/96(C) and 231/96(C) Section 11 of the Central Excise Act, 1944."
3. We find, that in a similar situation, of ordering an adjustment against pending demands by the Assistant Commissioner, did not have the approval of the Tribunal and the bench in that case of Karan Packaging Pvt Ltd[2000(120)ELT 399] ordered the refund with interest of the deposit of the Managing Director, who had deposited the amount under Central Excise Act Section 35F order. Another bench of the Tribunal in the case of Super Cassettes Industries Ltd [1999(110)ELT 728], held that adjustments of refund for a demand under a different tariff heading was to legal. They found in that case:-
"The second question relates to whether such amounts can be adjusted as duty payable under a different tariff heading and if so, whether such adjustments can be made without issue of a proper demand to the manufacturer under Section 11A of the recovery of duty no levied or short levied. In this connection, appellants had relied on the Delhi High Court judgment in Bharat Commerce and Industries v. Union of India [1979(4) E.L.T. (j.527)(Del)]. In that case it was held that if levy and assessment of goods under one particular Tariff item is held to be illegal, the Department cannot refuse to refund that amount on the ground that duty could have been levied under some other Tariff item. The Hon'ble High Court held that it was to permissible to do so without a proper demand in terms of Rule 10. We find that the said ratio has been followed in Indian Plywood Mfg. Co. Ltd v. CCE [1985 (22) ELT 144 (T)]. Further the Tribunal had, in Indian Oil Corporation v. CCE [1991(54) ELT 110] held that duty paid under a particular heading is not to be adjusted towards duty payable under a different tariff heading ad also that procedures required under law have to be initiated before making any such adjustment.
In this view, we cannot approve the appropriation of the refund of the amount of duty paid on Cross Bars, held to be to. exigible, to be adjusted against some other demands of duty, pending on the issues/items, as has been done and approved by the lower authorities in this case.
4. In view of our findings and since refund is found to have satisfied the conditions of Section 11B, as found by the Assistant Commissioner, we find no reason to withhold its payment to the appellant. The orders of the lower authority as regards appropriation of refund are set aside and appeal allowed with directions to grant refund with the interest as per Section 11BB.
(Pronounced in open Court on.