2016 (8) TMI 666 - AT - Central Excise

Legality of adjustment of amount against the arrears out of the refund amount - demand alongwith interest and penalty had been confirmed against the appellant which were outstanding to be recovered - Held that - appellant had filed appeal against the impugned demand and CESTAT dismissed the appeal as the appellant had not filed the requisite permission from the Committee of Disputes of Cabinet Secretariat required to file an appeal by public sector units. Indeed even in its appeal, the appellant has admitted that its request for permission to file appeal against the order in terms of which the said demand was confirmed along with the interest and penalty was pending before the Committee on Disputes (COD). From this it is evident that at the time when the impugned demand with interest and penalty was adjusted from the refund, there was not only no stay against the recovery of the said dues nor was any stay application pending with regard thereto. Indeed the appeal against the order in terms of which the said dues were recoverable had been dismissed by CESTAT. In these circumstances, the lower authority is completely justified in holding that such adjustment was totally legal and proper in terms of Section 11 of Central Excise Act, 1944. - Decided against the appellant

Summary

Issues:
Adjustment of refund against outstanding dues, legality of adjustment under Section 11 of Central Excise Act, 1944, Time-barred appeal filing.

Analysis:

Adjustment of refund against outstanding dues:
The appellant contested the adjustment of the refund amount against outstanding arrears, interest, and penalty, arguing that it was illegal as they had filed an appeal against the order confirming the demand. The appellant claimed they had applied for permission to file an appeal, citing Board's Instruction No. 788/21/2004-Ex, which prohibits coercive action during appeal processes. However, it was found that the appellant's appeal had been dismissed by CESTAT as they failed to obtain the necessary permission from the Committee on Disputes. As there was no stay against the recovery of dues and no pending stay application, the adjustment was deemed legal under Section 11 of the Central Excise Act, 1944.

Legality of adjustment under Section 11 of Central Excise Act, 1944:
Section 11 of the Central Excise Act, 1944 allows for the deduction of sums payable to the Central Government from any money owed to the assessee, unless there is a stay against such recovery. In this case, since the appellant's appeal had been dismissed due to the lack of required permission, and there was no stay against the recovery of dues, the adjustment of the refund against outstanding amounts was deemed justifiable and in accordance with the law.

Time-barred appeal filing:
The Commissioner (Appeals) noted that the appellant filed the appeal more than 1.5 years after the communication of the original order, exceeding the prescribed period of 60 days for filing an appeal. The Commissioner rightly held the appeal as time-barred and not maintainable. The appellant did not contest this ground in their appeal papers, further supporting the rejection of the appeal based on being time-barred. Therefore, the Commissioner's decision to dismiss the appeal on the grounds of being time-barred was deemed sustainable.

In conclusion, the Tribunal found no infirmity in the impugned order, leading to the dismissal of the appeal. The judgment highlights the importance of compliance with procedural requirements, including timely filing of appeals and obtaining necessary permissions for legal actions, to ensure the validity of claims and appeals in legal proceedings.