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2006 (3) TMI 73 - AT - Service TaxSanctioning the rebate claim filed by the applicants for Rs. 20.54 crores and adjusted towards recovery of the amount confirmed vide OIO - stay in any case has been again extended in the present case on 3-1-2006. Therefore, the present act of the Assistant Commissioner in ordering the appropriation is in gross violation of the order of stay - appropriation of Rs. 20.54 crores ordered is bad in law & is required to be set aside & the Asst. Commissioner is ordered to grant a refund of the amount
Issues: Stay extension, appropriation of refund against pending demands
In this judgment by the Appellate Tribunal CESTAT, Mumbai, the issue revolves around the extension of stay granted in a previous order and the subsequent appropriation of a refund against pending demands. The Tribunal initially granted an unconditional stay, which was extended until the appeal's disposal. However, the Excise department attempted to appropriate a refund against the demands involved in the pending appeal, which was viewed as interference in the judicial decision-making process. Despite the appeal being heard and pending final disposal, the department proceeded to sanction the rebate claim and adjust it against the amount confirmed in the original order, leading to a violation of the stay order. The Tribunal referred to a previous case where it was established that there was no need to approach the Tribunal for each stay extension, as the Tribunal had the power to grant stay until the appeal's disposal. The Assistant Commissioner's act of appropriating the refund was deemed to be in contempt of the Tribunal's order and the High Court's decision in the referenced case. The Tribunal highlighted that any amount due cannot be appropriated against other pending demands, as established by various decisions. Consequently, the Tribunal found the appropriation of the refund to be unlawful and ordered the Assistant Commissioner to refund the amount along with interest. The Miscellaneous Application was allowed accordingly, emphasizing the importance of upholding the legal principles surrounding stay orders and appropriation of funds in such cases.
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