2017 (8) TMI 887 - AT - Central Excise

Adjustment of refund granted against the outstanding interest on the supplementary invoices - Held that - there is no adjudication order passed to demand interest against the appellant and under which provisions the demand of interest was confirmed against the appellant. In that circumstances, the demand of interest against the appellant is immature - the question of adjustment does not arise - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Adjustment of refund claim against outstanding interest on supplementary invoices.

Analysis:
The appellant filed appeals against an order adjusting the sanctioned refund claim against outstanding interest on supplementary invoices. The appellant was directed to pay interest, but they disputed the need for payment. The appellant's refund claim was held valid based on previous orders, but it was adjusted against the outstanding interest. The appellant contended that the issue of interest payment on supplementary invoices is under dispute before a Larger Bench of the Apex Court. The appellant argued that since there was no adjudication order for the interest demand and the basis of the interest demand was unclear, the adjustment of the refund claim was unjustified. The AR supported the impugned order's findings.

The Tribunal considered the submissions and focused on whether the refund claim could be adjusted against a disputed demand pending before the Apex Court. It was noted that there was no adjudication order confirming the interest demand against the appellant, and the legal basis for the interest demand was not specified. As a result, the Tribunal concluded that the demand for interest against the appellant was premature, and therefore, the adjustment of the refund claim was deemed inappropriate. Consequently, the impugned order regarding the adjustment of the refund claim was set aside, and the appeals were allowed with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the adjustment of the refund claim against the outstanding interest on supplementary invoices. The decision was based on the lack of a confirmed adjudication order for the interest demand and the unresolved dispute regarding the interest payment, which made the adjustment premature and unjustified.