2006 (12) TMI 429 - AT - Central Excise

Summary

Issues involved: Appeal against rejection of refund of Rs. 1,30,807.

The appellant filed an appeal against the rejection of a refund claim of Rs. 1,30,807, which was initially deposited as a pre-deposit amount. The Commissioner (Appeals) had confirmed a demand of Rs. 5,69,193, and the appellant sought a refund of the excess amount. However, the adjudicating authority had adjusted the refund against another pending demand of duty arising from a separate order-in-appeal. The main contention raised was that the adjustment of the refund against a different demand was not legally sustainable.

The appellant argued that the adjustment of the refund of the pre-deposit amount against another pending demand was not permissible under the law. The appellant had deposited the amount as a pre-deposit, and the adjudicating authority should not have adjusted it against a different penalty that was pending before the Tribunal. The appellant cited relevant legal precedents to support their argument.

The Departmental Representative supported the decision of the Commissioner (Appeals) and argued that the adjustment of arrears from the refund amount was authorized under Section 11 of the Central Excise Act. It was contended that the adjustment was valid as it was within the powers granted by the law.

Upon review of the case and considering the arguments presented, the Tribunal found that the adjustment of the refund against another pending case was not justified. The Tribunal noted that the appellant had deposited the amount as a pre-deposit against a stay order issued by the Commissioner (Appeals). The Tribunal also highlighted that the appellant had obtained a stay order in the case against which the refund was adjusted. Citing relevant legal decisions, the Tribunal set aside the lower authorities' order and allowed the appeal with consequential relief.