Custom, Excise & Service Tax Tribunal
M/S. Kec International Ltd vs Cce & St Bhopal on 14 February, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. III Excise Appeal No. 3708, 3709 and 3710 of 2012-Ex(SM) [Arising out of Order-In-Appeal No. 156 to 158/BPL/2012 dt. 21.8.2012 passed by Commissioner of Customs & Central Excise (Appeals), Bhopal] For approval and signature: Honble Ms. Archana Wadhwa, Member (Judicial) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s. KEC International Ltd. Appellants Vs. CCE & ST Bhopal Respondent
Appearance:
Shri Hemant Bajaj, Advocate for the Appellant Shri B B Sharma, AR for the Respondents Date of Hearing : 14.02.2014 ORDER NO .FO/ A/ 50737-50739 /2014-SM(Br) Per Archana Wadhwa:
All three appeals are being disposed of by a common order as the issue is identical. It is seen that the appellant filed 3 refund claims totally amounting to Rs.9,24,949/-. The said rebate claims were sanctioned by the proper officer but adjusted against the confirmed demand of interest. It is seen that the original adjudicating authority made a reference to one order in original No., 24-26 /Commr/CEX/2008 dated 4.11.2008 vide which the total confirmed demand was to the tune of Rs. 33,09,081/- As such, order so confirmed by the Tribunal-Delhi was pending before the Supreme Court but without stay, the original adjudicating authority observed that the appellant had already deposited an amount of Rs. 31,85,705/- and the sanctioned rebate was adjusted towards unpaid demand of Rs.1,23,376/-. The balance sanctioned rebate was confirmed against some demands of interest which the Revenue felt was required to be paid by the assessee.
2. Learned advocate is not disputing the adjustment of Rs.1,23,376/- but submits that the said adjustment would be subject to outcome of their appeal pending before Supreme Court. In respect of balance amount, he submits that there was no show cause notice, no adjudication proceedings and no confirmation of demand by the proper officer, in which case, adjustment of rebate claims against the unconfirmed demand is not justified. For the above proposition, he relies upon various decisions of the Tribunal.
3. One such reference can be made to Tribunals decision in the case of Stella Rubber Works vs. CCE Bangalore [2007 (211) ELT 433 (Tri-Bang)]. Dealing with an identical situation, Tribunal observed that inasmuch as the Revenue had not issued any show cause notice demanding interest, the sanctioned rebate claims cannot be adjusted, which has been adjusted in terms of section 35 of the Act. The said decision of the Tribunal stands confirmed by the Honble Karnataka High Court when the appeal filed by the Revenue was rejected reported as CCE Bangalore vs. Stella Rubber Works [2011 (267) ELT 495 (Kar)]. Infact the Honble Karnataka High Court took a very serious note and observed that it was unfortunate that Revenue invoked such excuses for not paying back the assessees amount, which are legitimately due to them. While upholding the order of the Tribunal, Honble Karnataka High Court also imposed penalty of Rs. 5,000/- on the Revenue.
The facts of the present case are identical to the facts involved in the above referred decision. Learned advocate has drawn my attention to letter dated 29.3.2012 addressed by the Superintendent to the appellant giving details of interest against which the balance amount of rebate of Rs.8,01,573/- was adjusted. The said letter also mentions that higher officers at the relevant time were of the opinion that no show cause notice be issued for recovery of interest, hence no show cause notice was issued for the above amount. Learned advocate has also made a statement at bar that even subsequent to the said letter, they have not been issued a show cause notice for confirmation of any demand of interest. It is well settled law that any demands from an assessee are required to follow the principle of natural justice, which includes issuance of show cause notice, affording a reasonable opportunity to the assessee to put forward its case and adjudicating the matter thereof. Such type of interest confirmation without following due principles of natural justice cannot be appreciated inasmuch as they represent only one sided view of the Revenue. As such, the adjustment of sanctioned rebate claims against the interest amount, which never stand adjudicated by the department, cannot be upheld in terms of law declared by the Honble Karnataka High Court. Accordingly, all the appeals are allowed to the extent of rebate claim of Rs.8,01,573/-. with consequential relief to the appellants.
(Pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
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