2002 (1) TMI 102 - AT - Central Excise

Summary

Issues:
Challenge against order of Commissioner (Appeals) allowing refund claim but set off against duty demand confirmed earlier.

Analysis:

The appeal before the Appellate Tribunal concerned the challenge against the order of the Commissioner (Appeals) allowing the assessee's appeal against the order passed by the adjudicating authority. The Assistant Commissioner had allowed a claim for refund but set off the same against a demand of duty confirmed earlier. The assessee contended that the appropriation of the refundable amount towards the duty confirmed was unwarranted due to pending appeals and stay applications. The lower appellate authority allowed the assessee's appeal based on the stay of operation of the Board's Circular, which was confirmed by the High Court. The Revenue appealed against this decision.

During the hearing, the Revenue argued that the Circular issued by the Board should not override the statutory provision under Section 11 of the Central Excise Act, which allows deduction of duty payable from any money owing to the assessee. The Revenue sought to set aside the order of the Commissioner (Appeals) based on this argument.

On the other hand, the respondents argued that the duty amount was not recoverable as their appeal against the duty demand confirmation was pending, along with their stay application. They relied on a decision by the M.P. High Court to support their position. The respondents urged that the Revenue's appeal be rejected.

The Tribunal examined the submissions and found that the Circular issued by the Board prevented coercive action for duty recovery during the pendency of appeals and stay applications. The Tribunal disagreed with the Revenue's argument that the Circular conflicted with Section 11 of the Act. It was held that coercive action to recover duty during pending appeals was not permissible. The Tribunal cited the M.P. High Court's decision, stating that duty cannot be considered recoverable when appeals and stay applications are pending. Therefore, Section 11 was not applicable in this case. The Tribunal concluded that the lower appellate authority correctly set aside the order of the adjudicating authority, as the duty was not recoverable due to pending appeals and stay applications. The Revenue's appeal was rejected.