1985 (11) TMI 60 - HC - Central Excise

Summary

Issues:
1. Whether the respondent is entitled to debit the account of the petitioner for a sum of Rs. 3,83,836.80 even after the demand was set aside by the appellate order.
2. Whether the respondent's adjustment of the sum from the refund claim of the petitioner is lawful.
3. Whether the show cause notice issued by the respondent is valid and justifiable.
4. Whether the petitioner is entitled to a refund of the debited amount.

Analysis:
1. The judgment addresses the issue of whether the respondent, an Assistant Collector of Central Excise, is authorized to debit the petitioner's account for Rs. 3,83,836.80 after the demand was set aside by the Collector of Central Excise (Appeals). The court emphasizes that once an order of demand is set aside, the parties' positions should be restored to the status quo ante. The court rules that the respondent had no authority to debit the amount after the appeal decision and directs the refund of the sum to the petitioner's ledger account.

2. The court examines the legality of the respondent's adjustment of Rs. 3,83,836.80 from the petitioner's refund claim. It is established that the adjustment was improper since the original demand had been set aside, and the matter was pending for a de novo decision. The court holds that the adjustment was not justified and orders the respondent to credit the amount back to the petitioner's ledger account.

3. The judgment evaluates the validity of the show cause notice issued by the respondent to the petitioner. The court declines to quash the notice, stating that it must be replied to and decided in accordance with the law. The court emphasizes that the petitioner should be given an opportunity for a hearing if requested. The proceedings on the show cause notice are allowed to continue alongside the pending proceedings before the respondent.

4. Lastly, the court determines that the petitioner is entitled to a refund of Rs. 3,83,836.80, directing the respondent to credit the amount back to the petitioner's ledger account immediately. The court refuses the reliefs sought for quashing the show cause notice and restraining further proceedings on it. Each party is ordered to bear their own costs in light of the circumstances of the case.