2016 (6) TMI 441 - AT - Central Excise

Appropriation of rebate sanctioned in cash against the custom duty arrears - As per the Revenue, the appropriation is permitted in accordance with law whereas as per the appellants the appropriation of rebate of refund cannot be done against the customs duty arrears by invoking Section 142 of the Customs Act - Held that - All the orders against which appropriation is made have been challenged by the appellant before this Tribunal and the stay has been granted by this Tribunal and they are pending for final disposal and the demand has not attained finality. Further it is a settled position of law as held in the cases cited above that the appropriation of refund amount towards duty demand pending in other cases which has not attained finality is not legal and proper. Therefore keeping in view the above stated position, we are of the considered view that the appropriation of refund claim against disputed pending custom appeals is not sustainable in law as the demands in those cases have not reached finality. Therefore we set aside the impugned order and allow the appeals with consequential relief if any.

Summary

Issues Involved:
Appropriation of rebate against custom arrears without finality of demands.

Analysis:
The appeals were against orders-in-appeal upholding the appropriation of rebate against custom arrears by the Assistant Commissioner of Central Excise. The appellants exported excisable goods and filed rebate claims, which were sanctioned but appropriated against custom arrears. The main issue was whether such appropriation was lawful when the demands had not attained finality. The appellants argued that Section 11 of the Central Excise Act should only apply when demands are final. They cited precedents to support their claim. The Tribunal noted that the demands in question were under challenge and had not reached finality. It was established that appropriating refunds against pending custom appeals without finality was not legally permissible. The Tribunal set aside the impugned order and allowed the appeals.

In conclusion, the judgment focused on the legality of appropriating rebate against custom arrears without the demands attaining finality. The Tribunal emphasized that such appropriation was not sustainable in law when demands were still pending and subject to challenge. The decision was based on established legal principles and precedents, ultimately ruling in favor of the appellants and setting aside the orders-in-appeal.