2018 (6) TMI 776 - AT - Central Excise

Adjustment of the sanctioned refund claim against outstanding demands - refund of the amount of ₹ 10 lakhs which the appellant was directed to deposit as a condition of hearing their appeal, which stand deposited by them - Held that - Admittedly, the appellant has to pay the Revenue the confirmed demands - Mere filing of appeal before the Hon ble High Court, without there being any stay, cannot be considered as pendency of the appeal. The Tribunal being the last fact finding body, the orders passed by it have to be taken as having attained finality, unless stayed or reversed by higher appellate forum - appeal dismissed - decided against appellant.

Summary

Issues:
Adjustment of sanctioned refund claim against outstanding demands.

Analysis:
The dispute in the appeal pertains to adjusting the sanctioned refund claim against outstanding demands. Initially, demands of approximately ?67 lakhs were confirmed against the assessee for the year 2006-07. The Tribunal directed the appellant to deposit ?10 lakhs for hearing their appeal, which was done. Subsequently, the Tribunal set aside the confirmation of demand and penalty, entitling the appellant to a refund of the pre-deposited amount of ?10 lakhs. The appellant sought refund from the Revenue, but the lower authority adjusted this amount against an outstanding demand of ?1.89 crore confirmed in 2010. The appellant challenged this adjustment before the Commissioner (Appeals) and subsequently in the present appeal.

Another demand of around ?1.90 crore was confirmed by the Commissioner of Customs, Indore, against which the sanctioned refund was adjusted. The appellant's advocate acknowledged that the Tribunal upheld this demand, but they have appealed to the High Court without obtaining a stay of the Tribunal's order. The advocate argued that instead of adjusting the refund against the confirmed demand, the Revenue should have granted the refund. However, the advocate was not agreeable to depositing the confirmed demands in the absence of a stay by the High Court.

The Revenue contended that the appellant, having lost the demand case till the Tribunal and only filed an appeal before the High Court without a stay, is obligated to pay the confirmed demand and penalties. The Revenue argued against granting the refund while confirmed demands are pending recovery. The Commissioner (Appeals) justified the adjustment based on statutory provisions and lack of stay against the Tribunal's order.

The Tribunal upheld the Revenue's position, emphasizing that the appellant must pay the confirmed demands, even though they sought a refund instead. The Tribunal noted that the disputed issues in the demand cases were settled up to the Tribunal level, and filing an appeal before the High Court without a stay does not imply pending appeal status. The Tribunal considered the Tribunal's orders final unless stayed or reversed by a higher forum, thus rejecting the appeal against the adjustment of the refund.

In conclusion, the Tribunal upheld the adjustment of the sanctioned refund against outstanding demands, emphasizing the appellant's obligation to pay confirmed demands and penalties, despite their request for a refund. The Tribunal deemed the Tribunal's orders final and found no justifiable reason to set aside the adjustment made by the Revenue.