2001 (10) TMI 1200 - AT - Central Excise

Summary

Issues:
1. Adjustment of refund amount against earlier confirmed demands.
2. Legality of the Assistant Commissioner's order regarding the refund claim.
3. Approval of the Tribunal for adjustment of refund against pending demands.
4. Appropriation of refund amount against different demands.

Analysis:

1. The first issue revolves around the adjustment of a refund amount against earlier confirmed demands. The Commissioner (Appeals) upheld the Assistant Commissioner's decision to adjust a refund of Rs. 81,491 against central excise duty due from the appellant confirmed in earlier orders. The Judicial Member, S.S. Sekhon, found no infirmity in the Assistant Commissioner's order, stating that the adjustment was legally issued in conformity with the law since there was no stay of the recovered amount of the earlier confirmed demands on the relevant date. Therefore, the order of the Assistant Commissioner was deemed correct, legal, and proper, requiring no interference.

2. The second issue concerns the legality of the Assistant Commissioner's order regarding the refund claim. The Assistant Commissioner had concluded that the refund claim of M/s. KSEB for excise duty paid on Cross Arms satisfied the conditions under Section 11B of the Central Excise Act, 1944. The Assistant Commissioner sanctioned a refund of Rs. 81,491 to M/s. K.S.E.B. and ordered its adjustment against central excise duty due from the appellant. However, the Tribunal, in a similar situation, disapproved of such adjustments against pending demands, citing precedents where adjustments for demands under different tariff headings were deemed illegal. Despite the Assistant Commissioner's findings, the Tribunal found no reason to withhold the payment of the refund to the appellant and set aside the lower authority's orders regarding the appropriation of the refund.

3. The third issue addresses the approval of the Tribunal for the adjustment of refunds against pending demands. The Tribunal referenced cases like Karan Packaging Pvt. Ltd. and Super Cassettes Industries Ltd., where adjustments against demands under different tariff headings were not approved. The Tribunal emphasized that duty paid under a particular heading should not be adjusted towards duty payable under a different tariff heading without following the required procedures under the law. Consequently, the Tribunal disapproved of the appropriation of the refund of duty paid on Cross Arms against other demands pending on different issues/items.

4. Lastly, the fourth issue pertains to the appropriation of the refund amount against different demands. In light of the Tribunal's findings and the satisfaction of conditions under Section 11B, the Tribunal directed the grant of a refund with interest to the appellant, setting aside the lower authority's orders regarding the appropriation of the refund amount. The appeal was allowed with directions to grant the refund with interest as per Section 11BB.