2016 (6) TMI 1257 - AT - Central Excise

Refund claim - adjudicated dues - Held that - only adjudicated dues are recoverable under the provisions of Section 11 of the Act. Thus, the amount of ₹ 15,69,672/- have been wrongly appropriated. I further direct the adjudicating authority to refund the amount of ₹ 15,16,672/- with interest as per Rules within 60 days from the date of receipt of this order - So far the amount of ₹ 4,46,567/- is concerned, I find that the matter is pending pursuant to remand by this Tribunal vide the earlier order dated 2-9-2011. The refund of ₹ 4,46,567/- will be subject to the finalisation of adjudication pursuant to remand - Appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection, Appropriation of amount, Adjudicated dues recovery, Pending adjudication, Grant of refund with interest.

Refund Claim Rejection:
The appellant, a manufacturer of pan masala, filed a refund claim for an unspent amount in the PLA account after closing down manufacturing operations. The Asstt. Commissioner rejected part of the claim, citing the seizure of gutka and non-compliance with the manufacturing process. The appellant sought destruction of the seized goods, which was initially denied. The Commissioner later observed non-compliance with previous orders and rejected the destruction request. The Deputy Commissioner noted the goods were still with the appellant and emphasized refund eligibility only upon closure of business and liability settlement, which had not occurred yet.

Appropriation of Amount:
The Asstt. Commissioner appropriated a portion of the refund against adjudicated dues, leading to an appeal by the appellant. The Commissioner upheld the appropriation under Section 11 of the Act, allowing deduction from any money owed to the appellants. The appellant challenged this decision, arguing that the amount in question was not an adjudicated due, leading to the appeal before the Tribunal.

Adjudicated Dues Recovery:
The Tribunal found that only adjudicated dues are recoverable under Section 11 of the Act. It held that the amount wrongly appropriated should be refunded with interest. The Tribunal directed the adjudicating authority to refund the amount within 60 days. Regarding another amount subject to pending adjudication, the Tribunal ruled that the refund would be contingent upon the finalization of the pending matter. The adjudicating authority was instructed to issue a reasoned order within 60 days in line with the Tribunal's earlier directive.

Grant of Refund with Interest:
The appellant's counsel argued for the grant of refund with interest for the undisputed crystallized demand. The Tribunal allowed the appeal, directing the refund of the disputed amount and pending adjudicated sum, subject to finalization of the pending matter. The decision emphasized adherence to the Tribunal's previous order for a reasoned decision within the specified timeframe.

This comprehensive analysis of the judgment highlights the issues related to the refund claim rejection, appropriation of amounts, recovery of adjudicated dues, pending adjudication matters, and the grant of refund with interest as addressed by the Tribunal in the case.