2004 (11) TMI 147 - AT - Central Excise

Summary

Issues:
Whether the Department can adjust the amount of refund against the demand due from the respondents, M/s. Gahoi Foods Pvt. Ltd.

Analysis:
The appeal filed by the Revenue questioned the Department's authority to adjust the refund amount against the demand from the respondents. Despite the absence of the respondents during the proceedings, the issue was considered due to its narrow scope. The respondents had claimed a refund of duty and penalty, which was rejected by the Deputy Commissioner as time-barred for duty but allowed for penalty, to be adjusted against a prior demand confirmed in another order. The Commissioner (Appeals) ruled that the limitation did not apply to the duty amount and that the penalty refund could not be offset against other pending demands. The Revenue contested this decision, citing the case of Pyarelal Rameshwar Prasad v. CCE, Allahabad, for support.

The Tribunal referred to Section 11 of the Central Excise Act, which authorizes the recovery of sums due to the Government by deducting from amounts owed by the individual. It was established that the duty demand against the respondents, confirmed in a previous order, remained unpaid. Based on this, the Department was deemed legally empowered to adjust the refund against the outstanding demand. The Tribunal aligned with the decision in the case of Pyarelal Rameshwar Prasad, supporting the Deputy Commissioner's action in offsetting the refund amount against the pending duty demand. Consequently, the impugned order was partially set aside, and the appeal by the Revenue was allowed.