2001 (10) TMI 135 - AT - Central Excise

Summary

Issues Involved:
1. Adjustment of refund against earlier demands without stay orders.
2. Legality of adjustment of refund against Central Excise duty due from the appellant.
3. Comparison with previous judgments regarding the adjustment of refund for demands under different tariff headings.

Analysis:

1. The present appeal involved a dispute regarding the adjustment of a refund against earlier demands without any stay orders in place. The Commissioner (Appeals) upheld the order of the Assistant Commissioner, stating that on the relevant date of the subject adjudication order, there was no stay of the recovered amount of the earlier confirmed demands. Therefore, the Assistant Commissioner was deemed to have rightly issued the adjustment order in conformity with the law. The appellate tribunal found no infirmity in the Assistant Commissioner's order and concluded that the adjustment was correct, legal, and proper as there was no stay order from the Tribunal at the relevant time.

2. The Assistant Commissioner had ordered the adjustment of the refund amount against the Central Excise duty due from the appellant, based on the findings that the refund claim satisfied the conditions under Section 11B of the Central Excise Act, 1944. The appellant's claim for refund was in respect of excise duty paid on specific products. The tribunal reviewed the Assistant Commissioner's conclusions and found that the adjustment of the refund against earlier demands was not approved by the Tribunal in similar situations in the past. Citing previous judgments, the tribunal emphasized that adjustments of refunds for demands under different tariff headings were not legal. Therefore, the tribunal set aside the lower authority's orders regarding the appropriation of the refund and directed the grant of refund with interest as per Section 11BB.

3. The tribunal compared the present case with previous judgments, including the case of Karan Packaging Pvt. Ltd. and Super Cassettes Industries Ltd., where adjustments of refunds for demands under different tariff headings were deemed impermissible without proper initiation of procedures and issuance of demands under the law. The tribunal highlighted that duty paid under a particular heading should not be adjusted towards duty payable under a different tariff heading without following the necessary legal procedures. Consequently, the tribunal disapproved of the appropriation of the refund against demands on different issues/items. In light of these comparisons and findings, the tribunal allowed the appeal and directed the grant of refund with interest, while setting aside the lower authority's orders regarding the appropriation of the refund.