2010 (8) TMI 390 - AT - Central Excise

Tax Tribunal Upholds Refund Appropriation, Rejects Commissioner's Annulment Decision. Section 11 Central Excise Act.

The Tribunal held that the original authority's appropriation of a refund towards arrears of duty was lawful as the appeal against the relevant order had ... Recovery – Adjustment of refund against dues - Circular No. 13/92-CX., dated 4-11-92 issued by the CBEC clarified that “refund amounts due to an assessee should be appropriated by proper officer against confirmed demand only when time limit for filing the appeal against such confirmed demand has expired - appeal filed by the assessee against the relevant order of demand was dismissed by the Tribunal and no further appeal is pending - original authority was in accordance with law and that the Commissioner (Appeals) wrongly vacated the order - adjustment allowed - order set aside and the order of the original authority restored – Appeal allowed in favor of revenue. Issues:1. Appropriation of refund towards arrears of duty.2. Validity of the Commissioner's order-in-appeal.3. Interpretation of Section 11 of the Central Excise Act, 1944.Issue 1: Appropriation of refund towards arrears of dutyThe appeal involved the appropriation of a refund of Rs. 1,43,000 towards arrears of duty imposed on the respondent. The Commissioner (Appeals) annulled the appropriation ordered by the original authority, citing lack of finality in the relevant order. The appellant argued that the Commissioner placed incorrect reliance on previous decisions regarding pre-deposit appropriation. The Tribunal examined Section 11 of the Central Excise Act, 1944, which empowers the recovery of duty from any money due to the assessee. The Tribunal found that the original authority's appropriation was lawful, as the appeal against the relevant order had been dismissed, and no further appeal was pending. Consequently, the impugned order was set aside, and the original authority's decision was reinstated.Issue 2: Validity of the Commissioner's order-in-appealThe Commissioner (Appeals) had annulled the appropriation ordered by the original authority, questioning the finality of the relevant order. The appellant contended that the Commissioner erred in relying on past decisions regarding pre-deposit appropriation. The Tribunal analyzed the legal provisions under Section 11 of the Central Excise Act, 1944, and relevant circulars empowering the appropriation of refunds against confirmed demands. The Tribunal concluded that the Commissioner's decision to vacate the original authority's order was incorrect. Therefore, the impugned order was set aside, and the original authority's decision was upheld.Issue 3: Interpretation of Section 11 of the Central Excise Act, 1944The Tribunal extensively examined Section 11 of the Central Excise Act, 1944, which authorizes the recovery of duty from money owed to the assessee. The Tribunal referenced Circular No. 13/92-CX, clarifying the proper procedure for refund appropriation against confirmed demands. In this case, the Tribunal found that since the appeal against the relevant order had been dismissed by the Tribunal, and no further appeal was filed, the original authority's decision to appropriate the refund was in accordance with the law. Consequently, the Commissioner's decision to annul the appropriation was deemed incorrect, and the original authority's order was reinstated.This detailed analysis of the judgment highlights the issues of appropriation of refunds towards arrears of duty, the validity of the Commissioner's order-in-appeal, and the interpretation of Section 11 of the Central Excise Act, 1944, providing a comprehensive overview of the legal reasoning and decision-making process involved in the case.