Court sets aside orders on rebate adjustment, directs review with hearing. Writ appeals disposed, no costs.

The court set aside the impugned orders related to the adjustment of the rebate amount and directed the respondent to reconsider the appellant's case, providing a proper opportunity for a hearing. The rest of the respondent's orders remained unaltered. The writ appeals were disposed of accordingly, with no costs.

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Issues Involved:
1. Adjustment of rebate against demand without proper opportunity.
2. Expiry of stay orders due to administrative reasons.
3. Applicability of Circular No. 925/15/2010-CX.
4. Violation of principles of natural justice.

Issue-wise Detailed Analysis:

1. Adjustment of Rebate Against Demand Without Proper Opportunity:
The appellant, engaged in the manufacture of various yarns, faced a demand of Rs. 1,12,87,214.26 from the Assistant Commissioner of Central Excise, Madurai. The appellant's appeals to the Commissioner (Appeals) and CESTAT were dismissed, and subsequent stay petitions were filed. The CESTAT granted waivers and stays, but these expired due to statutory limits and administrative delays. The Superintendent of Central Excise issued a letter demanding payment or stay extension, which the appellant could not comply with due to CESTAT's non-sitting. The respondent adjusted the rebate amount against the demand without giving proper opportunity to the appellant, violating principles of natural justice.

2. Expiry of Stay Orders Due to Administrative Reasons:
The CESTAT initially granted stays which expired after six months. The appellant's petitions for further extensions were pending due to the non-availability of CESTAT members. The respondent demanded compliance within 10 days of the stay's expiry, but the appellant received this notice late and could not act in time. The court noted that the appellant could not be faulted for the administrative delays in CESTAT's functioning.

3. Applicability of Circular No. 925/15/2010-CX:
The appellant relied on Circular No. 925/15/2010-CX, which states that no coercive action should be taken if the assessee is not at fault and that the Tribunal can extend stays beyond six months. The court emphasized that this Circular, binding on the Revenue, was not considered by the respondent when adjusting the rebate. The Circular and the Supreme Court's judgment in Commissioner of Customs & Central Excise, Ahmedabad v. Kumar Cotton Mills Pvt. Ltd. supported the appellant's case.

4. Violation of Principles of Natural Justice:
The court found that the respondent acted hastily and without providing the appellant sufficient time to seek further stay extensions. The adjustment of the rebate amount without a proper hearing violated principles of natural justice. The learned single Judge's order was set aside for not considering these relevant factors.

Conclusion:
The court set aside the impugned orders related to the adjustment of the rebate amount and directed the respondent to reconsider the appellant's case, providing a proper opportunity for a hearing. The rest of the respondent's orders remained unaltered. The writ appeals were disposed of accordingly, with no costs.

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