2016 (12) TMI 332 - AT - Central Excise

Appropriation of amounts - sanctioned rebate amount appropriated towards demand claim - Held that - I find that the Adjudicating Authority, while disposing the rebate claim though sanctioned it, but appropriated the said amount against the demand confirmed in some other case; Appeal against which was pending before the first Appellate authority. Further, I find subsequently, the Ld. Commissioner(Appeals) set aside confirmation Order of the Adjudicating authority by its order dt 7.12.2012. Thus, in my view, appropriation of the rebate claim does not survive. In the result, the order passed by the Commissioner (Appeals) is upheld and Revenue s appeals being devoid of merit, accordingly dismissed - Decided against Revenue.

Summary

Issues:
- Appropriation of rebate amount against confirmed demand
- Interpretation of provisions of section 11 of CEA, 1944
- Validity of Commissioner (Appeals) decision

Analysis:
The case involved five appeals filed by the Revenue against the Order-in-Original (OIO) passed by the Commissioner of Central Excise. The Respondents, engaged in the manufacture of Edible Oils and Acid Oils, had cleared goods for export in Aug. 2009 with rebate claims amounting to ?11,40,877/-. The Dy. Commissioner sanctioned the rebate but appropriated it against a confirmed demand of ?12,19,882/- by the Addl. Commissioner, against which appeals were pending. The Respondents challenged this arbitrary appropriation, leading to the Ld. Commissioner (Appeals) allowing their appeals with consequential relief, prompting the Revenue's appeal.

The Ld AR for the Revenue argued that the Ld Commissioner (Appeals) erred in allowing the appeals, asserting that the appropriation of outstanding dues was correct under section 11 of CEA, 1944. Conversely, the Ld Advocate for the Respondents contended that since the order by the Additional Commissioner was challenged and set aside by the Ld Commissioner (Appeals), the appropriation of rebate against the demand confirmed in the earlier order was legally untenable.

The Member (Judicial) analyzed the case and found that the Adjudicating Authority, while sanctioning the rebate claim, had wrongly appropriated it against a demand confirmed in another case, which was subsequently set aside by the Ld. Commissioner (Appeals). Consequently, the appropriation of the rebate claim was deemed invalid. The order of the Commissioner (Appeals) was upheld, and the Revenue's appeals were dismissed for lack of merit. The Respondents were granted consequential relief as per law based on the impugned order.