TaxTMI 
TaxTMI 
2010 (9) TMI 346
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....he ship reached the Tribunal and the New Delhi Bench of the Tribunal vide stay order dated 13-3-89 ordered that the appellant should pay the balance amount of duty also as a condition of hearing the appeal. This was challenged by the appellants before the Hon'ble High Court of Mumbai who converted the requirement of deposit of cash to a bank guarantee which was furnished by the appellants. Since the problem had arisen because MSTC had not issued appropriate addendum revising the LDT of the vessel as 5179.58, the appellant filed SCA No. 498/1990 before the Hon'ble High Court of Gujarat against M/s. MSTC to which customs was also made a party. While this appeal was pending the appeal filed by the appellants against the finalization of assessment was disposed of by the Tribunal vide order No. 1559/96-A dated 20-5-96. The Tribunal in the order remanded the matter to original adjudicating authority with the following observations : "The appellant has told us that the MSTC Ltd. was approached with the complaint of the ship having a deficit of 500 L.T. as LDT and that at the instance of the latter, the appellant gave up the claim for refund of a proportionate sale price in writing, hopin....
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....ntee and ordered the appellant to file a refund claim under Section 27 of the Customs Act, 1962 ("the Act" for short) for the excess amount of duty of Rs. 4,71,447/- recovered earlier. On an appeal filed by the appellant, the appeal was rejected and hence the appellant is before this Tribunal once again with the following prayers : (a) The Tribunal direct the Revenue to refund Rs. 4,71,447/- with interest at 12% per annum from 20-8-96 till the date of actual payment. (b) The adjudicating authority was incorrect in directing the appellant to file refund claim under Section 27 of the Act to get the refund of the amount of Rs. 4,71,447/- and therefore he be directed to pay interest from the date refund became due i.e. 20-8-96. 3. Heard both the sides and have gone through the records. 4. The question before me is whether the amount of Rs. 4,71,447/-which was adjusted against the refunds due to the appellant after the confirmation of the demand can be treated as pre-deposit or it should be treated as duty paid. The contention of the Revenue is that this amount was not deposited because of any direction of the appellate authority or th....
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....02; that he has however, adjusted the amount of Rs. 23,89,022/- out of refund sanctioned to them against the demands confirmed by him under some other orders; that the Commissioner (Appeals) also under the impugned order has rejected their Appeal holding that in the light of Section 11 of Central Excise Act, the Adjudicating Authority has rightly adjusted outstanding Government dues from the given amount refundable to the appellants." The conclusion of Tribunal were as under : "We have considered the submissions of both the sides. Section 11 of the Central Excise Act contains provisions for the recovery of sums due to Government. This Section provides that in respect of dues and any other sums of any kind payable to the Central Government, under any of the provisions of the Central Excise Act or the Rules made thereunder, the officers may deduct the amount so payable from any money owing to the person from whom such sums may be recoverable or due, which may be in his hands or under his disposal or control. At the time of sanction of the refund to the Appellants, the demands of duty were outstanding against the Appellants as the same had not been set aside by any higher Appellate ....
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....ry by the proper officer in terms of the provisions of the Act towards differential duty and was not a pre-deposit made as a pre-condition for hearing of the appeal under the Customs Act. He has also observed that the Board's Crculars dated 2-1-02 and 8-12-04 relied upon by the appellants before him as well as before me are applicable to the refunds of pre-deposit made as a condition of hearing the appeal as per the provisions of Section 129E of the Act/Section 35F of the Central Excise Act, 1944 and not for amount recovered by adjustment towards confirmed demands of differential duty determined as a result of adjudication. Since there was a formal adjustment towards duty, the demand against which the adjustment has been made has to be initially set aside/vacated in an adjudication/appellate proceedings before a claim can be filed under Section 27 of the Act for refund of the duty. Before I proceed to consider several decisions cited by the learned advocate on behalf of the appellants, I consider it appropriate that the relevant provisions of the law and the circulars of the Board on the subject are considered. Section 129E of the Customs Act, 1962 relating to deposit pending appea....
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....peals) or the Tribunal directing a person to make a pre-deposit pending appeal does not arise. What the appellate authority does is to examine whether the appellant is required to deposit full amount of duty, interest and penalty or not and in case of undue hardship, waive the requirement of such pre-deposit and where it is considered appropriate stay the recovery. The circulars issued by the Board also take the same view since when we go through the circular issued in 2002, the circular does not speak of pre-deposit made as per the directions of the appellate authority but makes it clear that the issue is relating to pre-deposit made during the pendency of appeal. Therefore the observations of the Commissioner (Appeals) in his order in para 5.2(ii) that the amount recovered by the proper officer by adjustment cannot be considered as a pre-deposit but to be considered as a differential duty is not supported either by law or by the circulars issued by the Board. Therefore the amount recovered from the appellants by adjustment against the refunds has to be considered as pre-deposit made during the pendency of appeal. 11. The learned advocate for the appellants cited several dec....
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....s liable to be paid to the appellant from the date on which appeal is allowed by the Tribunal. 15. In the case of L&T Ltd. v. CC, Ahmedabad reported in 2005 (189) E.L.T. 179 (Tri. - Del.) also the same view was taken and it was held that appellants are entitled to interest on the amount of pre-deposit for a period beyond three months from the date of order of the Commissioner (Appeals). 16. In the case of Mahindra & Mahindra Ltd. v. CCE, Hyderabad reported in 2007 (213) E.L.T. 603 (Tri. - Bang.) = 2007 (6) S.T.R. 413 (Tribunal), it was held that appellant need not file any refund claim for refund of pre-deposit and is entitled to interest on deposit from date of expiry of three months from Tribunal order till date of payment of amount. In this case also the deposit had been made on 5-10-99. 17. In the case of Futura Fibres Ltd. v. CCE, Chennai reported in 2008 (232) E.L.T. 301 (Tri. - Chennai), a similar view was taken and it was held that interest at 12% is payable for the period beyond the date of order of the Tribunal. 18. Hon'ble Mumbai High Court in the case of Vikram Ispat v. UOI reported in 2009 (234) E.L.T. 74 (Bom.) also held that interest at 12% is....