HC allows writ petitions challenging adjustment of rebate claims against existing liabilities without enforceable demand

The HC allowed writ petitions challenging adjustment of rebate claims against existing liabilities. The court held that since appellate orders confirming recovery of Rs. 27,71,599/- were set aside and remitted for fresh consideration, no enforceable demand existed. The department lacked justification for adjusting this amount from petitioner's export rebates. The court directed refund of adjusted amounts with interest, noting that if petitioner is found ineligible in remand proceedings, the department can independently recover amounts from other refundable sums available at the time of the revisional authority's order.

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Issues involved:
The petitioner challenged impugned orders adjusting rebate claims against liabilities and subsequent reversals. The main issue was the adjustment of sanctioned rebate claims against the petitioner's liability.

Details of the judgment:

Issue 1: Adjustment of rebate claims against liabilities
The petitioner exported goods and filed rebate claims under Rule 18 of the Central Excise Rules, 2002. The respondents allowed these rebate claims but adjusted the amounts against the petitioner's liability based on previous orders. The adjustment was made pursuant to Order-in-Original No.2 / 2014, dated 13.03.2014, which was confirmed by Order-in-Appeal No.52 / 2014, dated 20.08.2014.

Issue 2: Reversal of sanctioned rebate claims
The petitioner had earlier exported goods and filed rebate claims which were sanctioned by the respondents. However, the sanctioned amount was reversed by the Commissioner of Central Excise (Appeals) in Order-in-Appeal No.104 / 2013, dated 20.08.2013. This reversal led to the adjustment of the sanctioned amount in the impugned orders.

Issue 3: Judicial review and remand
The petitioner challenged the orders of the Revisional Authority and the Appellate Commissioner, which confirmed the adjustments. The High Court set aside these orders and remanded the case back to the Original Authority for fresh consideration. The Court held that there was no pending demand against the petitioner for the adjusted amount.

Conclusion:
The High Court allowed the Writ Petitions, stating that there was no justification for adjusting the sanctioned rebate amount against the petitioner's entitlement. The Court directed the refund of the adjusted amounts with interest and allowed independent recovery if the petitioner was found ineligible for rebate in the remand proceedings.

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