Customs, Excise and Gold Tribunal - Bangalore
Stella Rubber Works (Unit-Ii) vs C.C.E. (Appeals-Ii) on 22 December, 2006
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Appeal No. 27/2006, dated 29-3-2006 by which the sanctioned rebate claim has been appropriated towards outstanding arrears of interest said to be due by the assessee. The duty demand pertains to the year 1982 which had been paid by the assessee. During that period, there was no law pertaining to charging of interest. The Department also did not issue show cause notice nor confirmed demands on which these interest amount was required to have been charged. Therefore, the appellants contested the issue on the ground that there was no confirmed demand for adjustment of this interest amount in terms of Section 11AA of the Central Excise Act. This plea has not been accepted by both the lower authorities.
2. The learned Counsel submits that an appropriation of amount due to the assessee against pending demands can be done, only if the pending demands have been confirmed by an order under Section 35 of the Act. He submits that the Tribunal and higher authorities have been clearly holding that appropriation of amounts in terms of Section 35F deposits, is also not justified as held in the case of Indian Aluminium Co. Ltd. v. CCE, Cochin 2006 (196) E.L.T. 253 (Tri.-Bang.). In the case of Executive Engineer, K.S.E.B. v. CCE, Cochin , a similar view has been expressed by this Bench and set aside the adjustment of demands against interest liability, which had not been determined by any order. In the case of Jay Kay Synthetics v. CCE, Chandigarh , the Tribunal held that amounts cannot be adjusted towards dues refundable to assessee, when such demands have not been adjudicated by issue of show cause notice. Similar views were expressed in the following cases:
(i) VBC Industries Ltd. v. CCE, Visakhapatnam
(ii) Sonarome Pvt. ltd. v. CCE, Bangalore 2005 (67) RLT 66.
(iii) Elgitread (India) Ltd. v. CCE, Cochin
(iv) Madura Coats Pvt. Ltd. v. CCE, Tirunelveli .
(v)A.S. Mohammed Kutty Co. v. CCE, Cochin Final Order No. 381/2005, dated 8-3-2005.
3. Heard learned JDR who reiterated the departmental view.
4. I have considered the submissions and perused the records. The appellants preferred rebate claim of Rs. 2,29,433/-, the same has been sanctioned by the Department and there is no dispute about the assessee being eligible for this amount. Instead of making payment of this amount to the assessee, the department informed the assessee that they were due interest with regard to the belated payment of duty pertaining to the period 1982-1984. These amounts had been paid although belatedly but the Revenue had not issued any show cause notice demanding interest. Therefore, the rebate claim which is sanctioned cannot be adjusted to an amount which has not been adjudicated in terms of Section 35 of the Act. The reading of Section 11AA discloses that any amount which is due to the Government could be adjusted with amounts to be paid to the assessee; but amount should have been adjudicated and only adjudicated amounts can be adjusted with dues to the assessee. All these citations clearly lays down this proposition. Respectfully following the citations rendered to by the learned Counsel, the impugned order is set aside by allowing the appeal with consequential relief, if any.
(Pronounced and dictated in open Court)