2006 (1) TMI 322 - AT - Central Excise

Summary

Issues:
Challenge to appropriation order without issuance of show cause notice.

Analysis:
The appellants filed a refund claim for an amount erroneously paid twice on the same goods, which was sanctioned by the competent authority. However, an order was passed to appropriate the refund amount towards a demand raised on the RT 12 returns. The appellants challenged this appropriation order, which was upheld by the Commissioner of Central Excise (Appeals). The main contention was the lack of a show cause notice before demanding the amount. The learned Advocate argued that the demand based on RT 12 returns was unsustainable without a show cause notice, citing relevant case laws.

The learned SDR contended that a show cause notice was issued for finalizing the pricelist, which led to the demand on the RT 12 returns. He relied on a Supreme Court decision stating that no show cause notice is required when there is a demand consequent to finalization of assessment. The Tribunal analyzed the case laws cited by both parties and emphasized the necessity of a show cause notice before imposing extra duty liability. However, in this case, the demand was based on the finalization of the pricelist approved in Order No. 2/95, and the assessment was valid.

The Tribunal further clarified that the demand arose from the final assessment of RT 12 returns, and the appellants were obligated to pay the duty within 10 days as per Rule 173-I of the C.E. Act. The Tribunal found no fault in the demand or the subsequent appropriation from the refund. It acknowledged the delay in appropriation and granted the appellants interest from the date of refund sanction. Ultimately, the Tribunal upheld the appropriation order but allowed interest on the refund amount.