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TMI Blog2016 (1) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... dent against confirmed dues. 4. The respondent were visited by the authorities and on such survey it was noticed that there was short payment of duty and were advised to deposit Rs. 10 lakhs, which was complied on 25.9.2004 before issue of show-cause notice. A show-cause notice dated 20.11.2004 was issued, proceedings culminated in favour of the respondent herein. The respondent filed refund of Rs. 10 lakhs deposited by them during the proceedings. The adjudicating authority vide order-in-original dated 6.2.2006 sanctioned the refund but adjusted the same against their outstanding penalty amount, which has been imposed on the respondent by another order-in-original dated 2.11.2007. Aggrieved by such a order, the respondent preferred an app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as considering the issue which is identical to the case before this Bench. He submit that in para 4, the Hon'ble High Court has laid down the law which is in favour of the assessee. He would submit that this Bench in the case of Mars International Vs. Commissioner of Central Excise, Pune-III - 2012 -(XC2)-GJX-1273-CESTAT, following the said judgment, has held that Section 11 of the Central Excise Act does not provide for adjustment of money due towards the amount due to Revenue. 7. On consideration of the submissions made by both sides, I find that the first appellate authority has justifiably held that the adjudicating authority could not have adjusted the amount of Rs. 10 lakhs towards the penalty imposed on the respondent by Order-i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en treated as duty. Therefore the provisions of Section 11B and subsequently those of Section 11BB apply to all refunds under Central Excise Act, 1944. Since the Order-in-Original No. 6/2002 dated 15.03.2002 which confirms the amount and appropriated the original deposit of Rs. 10 lakhs was set aside by the Tribunal on 17.06.2003 in terms of explanation to Section 11BB, interest on the refund of Rs. 10 lakhs is payable within three months from the date of the Tribunal's Order i.e. 17.06.2003." I find that the finding recorded by the first appellate authority is correct and in consonance with the law laid down by Hon'ble High Court of Karnataka in the case of Stella Rubber Works (supra). With respect I reproduce the ratio which is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance is placed on the judgments of CESTAT which gives an impression that adjustment is permissible. Such adjustment is not based on any statutory provision. When once the adjudicating the authority has held that the assessee is entitled to refund of the amounts which he had paid to the Department in the absence of a specific provision authorising the revenue adjusting the said amount towards due to them, it is improper for them to make such adjustment. In this view of the matter, there is no question of invoking equitable considerations. As without authority they cannot levy any duty on the assessee and without authority of the law they also cannot adjust the amounts which are ultimately due to the assessee when the amounts are due by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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