2010 (9) TMI 818 - CGOVT - Central Excise

Extension of stay order - recovery of amount due - Revision application - refund claims seeking rebate - goods manufactured and exported on payment of Central Excise duty paid under Rule 14 of the Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008 under Section 3A of the Central Excise Act, 1944 - held that - original adjudicating authority s orders of appropriations/adjustments might be proper in the given situation at time of non-existence of extension of stay already granted but the orders of the Commissioner (Appeals) herein are perfectly legal and proper as Hon ble CESTAT extended the stay already granted. Extension of earlier Stay Order 901-903/08-CX., dated 1-9-2008 covers the intervening period also. The lower authorities are bound to comply with the said order of Tribunal. The observation of Commissioner (Appeals), that the department to ensure compliance of C.B.E.C. Circular No. 354/70/97-CX., dated 13-11-97 cannot be taken as a point to question the legality of impugned Order-in-Appeal. Rather, it is the duty of the department to ensure the correctness of the eligibility of entitlement of the impugned rebate claims in all respect before finally sanctioning/granting of the same.

Issues:
1. Adjustment of rebate claims against pending confirmed demands during the pendency of stay application.
2. Legal validity of adjusting rebate amounts against confirmed demands.
3. Compliance with C.B.E.C. Circulars and Board Instructions.
4. Extension of stay granted by Hon'ble CESTAT and its impact on recovery actions.
5. Proper consideration of impugned rebate claims by lower authorities.

Analysis:

1. Adjustment of Rebate Claims: The case involved the adjustment of rebate claims against pending confirmed demands during the pendency of a stay application. The jurisdictional Range Officer reported a confirmed demand of duty and penalty pending against the appellant. The Adjudicating authority adjusted the rebate amounts against the confirmed demand, leading to the appellants filing an appeal against this adjustment.

2. Legal Validity of Adjustments: The appellant contended that adjusting rebate amounts against pending demands during the pendency of their stay application was coercive and not legally permissible. The Commissioner (Appeals) allowed the appeal, directing the sanction of rebate claims after considering the extension of stay granted by the Hon'ble CESTAT.

3. Compliance with Circulars and Instructions: The applicant challenged the order-in-appeal citing Board Circulars and Supplementary Instructions regarding recovery of dues in Central Excise. The Government noted the relevance of Circular No. 788/21/2004-CX and emphasized the need for compliance with legal provisions and circulars in such matters.

4. Extension of Stay by Hon'ble CESTAT: The Hon'ble Tribunal extended the stay till the disposal of pending appeals, which influenced the decision-making process. The Government acknowledged the importance of the stay order granted by the Tribunal and directed the lower authorities to comply with the extension granted by the Hon'ble CESTAT.

5. Proper Consideration of Rebate Claims: The Government upheld the order-in-appeal, emphasizing the legal validity of the Commissioner (Appeals)'s decision. The authorities were directed to ensure compliance with the Tribunal's stay order and to verify the eligibility of the rebate claims before sanctioning them. The Revision Application was rejected for lacking merit.

In conclusion, the judgment addressed the issues of adjustment of rebate claims against pending demands, compliance with circulars and legal provisions, the impact of the stay extension by the Hon'ble CESTAT, and the proper consideration of rebate claims by the lower authorities. The decision upheld the order-in-appeal, emphasizing the importance of following legal procedures and honoring stay orders granted by the Tribunal.

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