Tribunal rules in favor of appellant, orders release of sanctioned refund with interest.

The Tribunal set aside the appropriation of a refunded amount against a confirmed demand, directing a fresh hearing for the appellant. It was held that appropriation against unconfirmed demands is premature, especially when an appeal is pending or a stay is in place. The Member emphasized the importance of finality in demands before sanctioning refunds, ruling in favor of the appellant and ordering the prompt release of the sanctioned refund amount with interest.

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Issues: Appropriation of sanctioned refund amount against a confirmed demand, legality of appropriation by Dy. Commissioner, validity of stay granted by Tribunal post-appropriation.

Analysis:
1. The appellant challenged the impugned order related to the appropriation of a refunded amount against a confirmed demand. The Dy. Commissioner sanctioned a refund of Rs.3,83,000/- but sought to appropriate it against a different order before encashment. The Commissioner of Customs (Appeals) set aside the appropriation and directed a fresh hearing for the appellant.

2. The appellant argued that the appropriation within two months against another demand was illegal as there was still an appeal pending against the original order. The appellant contended that the Dy. Commissioner lacked the authority to appropriate the amount based on a simple letter from another official. Additionally, the appellant highlighted that the appeal was pending before the Tribunal with an absolute stay granted.

3. The Departmental Representative contended that the stay granted by the Tribunal post-appropriation rendered the appellant's argument invalid. However, the Member (Judicial) disagreed, stating that as long as an appeal is pending or a stay is in place against a confirmed demand, appropriation of the sanctioned amount is premature. The Member referenced the case of M/s. Voltas Ltd. vs. CCE, Hyderabad to support this position.

4. The Member found that the demand confirmed in the Order-in-Original was not final due to the pending appeal, making the appropriation premature. The Commissioner of Customs (Appeals) correctly applied the principle that appropriation against unconfirmed demands is not enforceable. The Member criticized the orders for directing the appellant to wait unnecessarily and held that the sanctioned refund amount should be released to the appellant promptly along with interest.

5. Consequently, the Member set aside both impugned orders, allowing the appeal with consequential relief. The judgment emphasized the importance of finality in demands before appropriation of sanctioned amounts and upheld the appellant's right to receive the refund without delay.

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