adjudication matter

[Asked by Guest]

Adjudicating officers normally appropriate in their O-in-O any payments including under VCES made before issue of SCN without adjusting the same against confirmed demand. Then, while filing appeal,appropriation is also to be contested or only the demand & penalty? what is diff between appropriation & adjustment?

[KASTURI SETHI]

Dear Sh.Prasad Ji,

As per literal meaning, " To appropriate means to take any thing without permission" and "Adjustment means to take or give anything with permission". It implies difference between both is of the element of "with or without permission".

Appropriation by the Adjudicating Authority is not illegal. It is as per Section 11/11A of the Central Excise Act. First demand is confirmed and, thereafter, the already paid amount is appropriated whether against duty or interest or penalty whatever the case may be. The Adjudication Authority gives legal shape to the amount deposited during the investigation i.e. before SCN and after the issuance of SCN

In case any appellate authority sets aside the OIO confirming the demand, the appropriation of any amount whether against duty, interest or penalty becomes null and void.

However, I advise you to oppose the appropriation of the amount also while filing appeal. If you do not oppose the appropriated amount that will be minus factor for the appellant in the appeal proceedings. You must oppose appropriation.

[Ganeshan Kalyani]

Nicely explained the difference between appropriation and adjustment. Thanks to Sri Kasturi Sir. It enriched my knowledge. Thanks.

AI Summary

Appropriation of pre notice deposits reallocates payments against confirmed excise liabilities and should be contested on appeal.
Appropriation of pre SCN deposits is lawfully effected by the adjudicating authority after confirmation of demand, allocating earlier payments against duty, interest or penalty without depositor consent; if an appellate authority sets aside the confirming order, such appropriation becomes void, and appellants should expressly contest appropriation on appeal to avoid prejudice.