Tribunal sets aside Commissioner's order, denies refund, allows recovery of paid amount.

The Tribunal allowed the appeal, setting aside the Commissioner (Appeals) order and denying the assessees' claim for refund. The department was permitted to recover the amount of Rs.1,25,000/- already paid, and the balance was not eligible for refund. The appeal was allowed by the Tribunal, rejecting the assessees' challenge against the part of the refund sanctioned as CENVAT credit.

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Issues:
1. Recovery of duty on goods cleared without payment.
2. Adjustment of amount already paid.
3. Imposition of penalty.
4. Claim for refund.
5. Appeal against sanctioning part of the refund as CENVAT credit.

Analysis:
1. The case involved a show-cause notice issued to the assessees, who were manufacturers of sodium silicate, proposing recovery of duty for clearing goods without payment. The Commissioner of Central Excise confirmed the demand, appropriated the amount already paid, and imposed a penalty. The assessees appealed to the Tribunal, which remitted the case for fresh decision. A subsequent claim for refund was filed by the assessees, which was rejected by the Asst. Commissioner. Further proceedings led to the Additional Commissioner again confirming the demand and imposing a penalty.

2. The Commissioner (Appeals) allowed the appeal of the assessees with consequential relief. The assessees filed another claim for refund, which was partially sanctioned, with Rs.1,25,000/- paid by cheque and the balance as CENVAT credit. However, the assessees appealed against the part of the amount sanctioned as credit, as they had closed down the factory and surrendered the registration.

3. The Tribunal set aside the Commissioner (Appeals) order, stating that the assessees were not eligible for a refund based on their decision. As Rs.1,25,000/- had already been paid, the department was permitted to recover that amount. The remaining balance was also not entitled to be refunded. Consequently, the impugned order was set aside, and the appeal was allowed by the Tribunal.

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