2018 (1) TMI 414 - AT - Central Excise

Refund of pre-deposit with interest - Section 35F of CEA - Section 35FF of CEA - grievance of the appellants is that their refund was adjusted without giving any opportunity of hearing - computation of interest - Held that - the adjudicating authority have erred in not calculating the interest payable to the appellants - assessee under the provisions of Section 35FF - adjustment of demand in exercise of powers under Section 11 of the Act from the refund payable to the appellant is bad to the extent the adjustment have been made without issue of any show cause notice for the intended adjustment. Adjudicating authority is directed to calculate interest - appeal allowed by way of remand.

Summary

Issues involved:
1. Refund of pre-deposit under Section 35F and refund with interest under Section 35FF of the Act.

Analysis:
1. Appeal No. E/70051/2017-EX[SM]:
- The appellant filed an appeal against the Order-in-Original confirming the demand and penalty imposed. The case went through multiple stages of appeal and remand.
- The appellant requested a refund of the pre-deposit amount of ?50,000. The refund was initially sanctioned but later adjusted against another demand without a hearing.
- The Tribunal found errors in not calculating the interest payable to the appellant under Section 35FF and deemed the adjustment of the refund without a show cause notice as improper.
- The Tribunal directed the adjudicating authority to calculate and disburse the interest on the pre-deposit amount of ?50,000 for the relevant periods and the adjusted amount within 45 days.

2. Appeal No. E/70052/2017-EX[SM]:
- Similar to the first appeal, this case involved the appellant's appeal against the Order-in-Original confirming the demand, penalty, and Cenvat credit disallowance.
- The appellant sought a refund of ?62,369, which was adjusted without a hearing against another demand.
- The Tribunal noted the failure to calculate interest under Section 35FF and the improper adjustment of the refund without a show cause notice.
- The Tribunal directed the adjudicating authority to calculate and disburse the interest on the pre-deposit amount and the adjusted amount within 45 days from the date of the order.

In both cases, the Tribunal emphasized the importance of calculating and disbursing interest as per the provisions of Section 35FF. The appellants were granted relief as the adjustments made without proper notice were deemed unjust. The directions issued by the Tribunal aimed at rectifying the errors and ensuring the timely payment of interest amounts to the appellants, providing a fair resolution to the refund issues raised in the appeals.