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TMI Blog2022 (2) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the then prevalent provisions the appellant was supposed to deposit 10% of duty and penalty amount without including the amount of pre-deposit made by him before Commissioner (Appeals), that the appellant made a pre-deposit of 17.5%, accordingly. The said deposit qualifies to be called as pre-deposit under Section 35 F of Central Excise Act. The Larger Bench of this Tribunal also, at the relevant time, IN RE: QUANTUM OF MANDATORY DEPOSIT [ 2017 (4) TMI 1222 - CESTAT NEW DELHI (LB)] had held that under Section 35F of Central Excise Act, 1944 and under Section 129E of Customs Act, 1962 the assessee is required to make separate pre-deposit of 10% of amount of duty confirmed / penalty imposed for preferring a second appeal to Tribunal against the order of Commissioner (Appeals) - Keeping in view the said prevalent situation at the time when the appellant herein made a pre-deposit of 17.5%, his refund claim pursuant to setting aside of the demand/ penalty has to be sanctioned with the interest at the said deposit @ 17.5 % of duty and penalty deposited instead of sanctioning the refund of mere 10% of duty and penalty. As far as, first point of adjudication is concerned, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of ₹ 23,57,058/- and ₹ 2,81,886/- was confirmed. The said demand was initially confirmed by Original Adjudicating Authority vide Order No.60/2015 dated 23.06.2015 along with the order of appropriation of amount of ₹ 2,81,885/ under Rule 14 of Cenvat Credit Rules 2004 read with Section 11 A of Central Excise Act, 1944. The interest was also ordered to be recovered and the penalty was also proposed. However, when the refund pursuant to the aforesaid final order of CESTAT was filed by the appellant, the same was sanctioned for the amount of pre-deposit to the extent of ₹ 5,90,053/- alongwith the refund of ₹ 2,81,886/-. Since the refund claim of appellant for ₹ 8,72,425/- was sanctioned only for an amount of ₹ 6,64,357/- after recovering the arrears amounting to ₹ 2,43,608/- that the order of original adjudicating authority was challenged by the appellant before Commissioner (A) who also vide the order under challenge had rejected the appeal. Being aggrieved the appellant is before this Tribunal. 3. I have heard Ms. Surabhi Sinha, ld. Counsel for the appellant and Mr. Ravi Kapoor, ld. Departmental Representative for the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder under challenge. Appeal is prayed to be dismissed. 6. After hearing the parties, following are held to be the issues to be adjudicated herein: (i) Whether the amount of mandatory deposit at the time of filing appeal before CESTAT is 10% of duty and penalties or just 2.5% of duties and penalties added to the pre-deposit of 7.5% thereof already made before Commissioner (Appeals). (ii) Whether the sanctioning authority can order adjustment/set off the amount of refund against the arrears towards assessee. Issue No.-(i) The appellant had paid the amount of pre-deposit at the rate of 10% of duty and penalty while filing appeal before the CESTAT over and above the 7.5% thereof as was paid while filling appeal before Commissioner (Appeals) against Order-in-Original No.115/Refund/AC/RD-I/2017 dated 10.04.2018 pursuant to the Show Cause Notice dated 27.06.2013 in terms of Circular No. 984/8/2014 dated 16.09.2014. As observed from the discussion and the decisions placed on record, it is apparent that said Circular stands superseded vide Circular No.1/5/2015 dated 05.07.2018. The said change has been made in terms of a decision of Hon ble Delhi High Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 944 and under Section 129E of Customs Act, 1962 the assessee is required to make separate pre-deposit of 10% of amount of duty confirmed / penalty imposed for preferring a second appeal to Tribunal against the order of Commissioner (Appeals). Keeping in view the said prevalent situation at the time when the appellant herein made a pre-deposit of 17.5%, his refund claim pursuant to setting aside of the demand/ penalty has to be sanctioned with the interest at the said deposit @ 17.5 % of duty and penalty deposited instead of sanctioning the refund of mere 10% of duty and penalty. 9. In view of the above discussion, as far as, first point of adjudication is concerned, the Adjudicating Authority below is held to have committed an error while not sanctioning the refund claim of entire amount of pre-deposit i.e. @ 17.5% of duty and /or penalty involved, that too, along with the interest. Issue No.-(ii) With respect to the second point of adjudication, it is observed that recovery of sums due to the Government is dealt with under section 11 of Central Excise Act, 1944. The said section has undergone an amendment in the year 2013. It is necessary to have a look on pre-amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount , the following shall be substituted, namely:- may deduct or require any other Central Excise Officer or a proper officer referred to in section 142 of the Customs Act, 1962 (52 of 1962) to deduct the amount so payable from any money owing to the person from whom such sums may be recoverable or due which may be in his hands or under his disposal or control or may be in the hands or under disposal or control of such other officer, or may recover the amount ; (b) after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely :- (2)(i) The Central Excise Officer may, by a notice in writing, require any other person from whom money is due to such person, or may become due to such person, or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central Government either forthwith upon the money becoming due or being held, or at or within the time specified in the notice, not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount; (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessee to recover the amounts due to them under the provisions of the Act but the refund to which assessee is entitled has to be sanctioned and disbursed in his favour. The said decision has been followed by CESTAT, Mumbai in the case of Commissioner of Central Excise, Mumbai vs. Johnson Johnson Ltd. reported in 2016 (335) ELT 163 after perusing section 11 it was held in this case as follows:- 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 in Para 4. I also find that this Bench in the case of Mars International followed Para 4 of the judgment of Hon ble High Court, in which it has been held as under : - 4. The learned counsel appearing for the revenue contended that by virtue of Section 11 of the Central Excise Act, 1944, the revenue was empowered to adjust the amounts due to the revenue by way of interest out of the amount due by the Department to the assessee by way of rebate. Therefore, the Tribunal committed a serious error in interfering with the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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