2013 (12) TMI 1491 - AT - Central Excise

Summary

Issues Involved: Refund claim u/s Central Excise Act, 1944, deduction of penalty from refund amount, appropriateness of penalty deduction, adjustment of duty confirmed against appellant.

Refund Claim u/s Central Excise Act, 1944:
The appellants, engaged in the manufacture and clearance of non-ferrous metals, filed a refund claim for unutilized balance in PLA account after factory closure. The adjudicating Authority sanctioned a refund but appropriated an amount against recovery from a previous order. The Commissioner (Appeals) upheld the deduction citing relevant case laws and previous penalties imposed on related parties. The appellant contested the deduction and relied on judgments. The Commissioner found the deduction justified and upheld it.

Deduction of Penalty from Refund Amount:
The lower authorities had deducted an amount towards penalty imposed on an employee of the appellant. The Commissioner found this deduction unjustified as the penalty was personal and should be recovered from the employee, not the refund claim. The Commissioner directed the lower authority to refund the deducted amount of &8377; 1 Lakh to the appellant.

Appropriateness of Penalty Deduction:
The Commissioner determined that the adjustment of penalty imposed on the employee from the refund claim was improper. The penalty being personal in nature should not have been deducted from the refund amount due to the appellant. The Commissioner held that the adjustment was not justified and ordered the refund of the deducted amount to the appellant.

Adjustment of Duty Confirmed Against Appellant:
The appellant did not contest the adjustment of &8377; 50,000 towards duty confirmed against them. The Commissioner noted this and directed the lower authority to refund &8377; 1 Lakh to the appellant, as the adjustment of the penalty imposed on the employee was deemed inappropriate. The appeal was disposed of accordingly.