TaxTMI 
TaxTMI 
2022 (2) TMI 732
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....entral Excise Act, 1944. The interest was also ordered to be recovered and the penalty was also proposed. However, when the refund pursuant to the aforesaid final order of CESTAT was filed by the appellant, the same was sanctioned for the amount of pre-deposit to the extent of Rs. 5,90,053/- alongwith the refund of Rs. 2,81,886/-. Since the refund claim of appellant for Rs. 8,72,425/- was sanctioned only for an amount of Rs. 6,64,357/- after recovering the arrears amounting to Rs. 2,43,608/- that the order of original adjudicating authority was challenged by the appellant before Commissioner (A) who also vide the order under challenge had rejected the appeal. Being aggrieved the appellant is before this Tribunal. 3. I have heard Ms. Surabhi Sinha, ld. Counsel for the appellant and Mr. Ravi Kapoor, ld. Departmental Representative for the Revenue. 4. It is submitted on behalf of the appellant that the appellant had already made a deposit of Rs. 7.5% at the time of filing the appeal before Commissioner (Appeals). Subsequently, when appeal before CESTAT was filed, according to Circular No. 984/8/2014 -CX dated 16.09.2014, the appellant had paid the amount equal to 10% of duty. Thus, ....
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....eady made before Commissioner (Appeals). (ii) Whether the sanctioning authority can order adjustment/set off the amount of refund against the arrears towards assessee. Issue No.-(i) The appellant had paid the amount of pre-deposit at the rate of 10% of duty and penalty while filing appeal before the CESTAT over and above the 7.5% thereof as was paid while filling appeal before Commissioner (Appeals) against Order-in-Original No.115/Refund/AC/RD-I/2017 dated 10.04.2018 pursuant to the Show Cause Notice dated 27.06.2013 in terms of Circular No. 984/8/2014 dated 16.09.2014. As observed from the discussion and the decisions placed on record, it is apparent that said Circular stands superseded vide Circular No.1/5/2015 dated 05.07.2018. The said change has been made in terms of a decision of Hon'ble Delhi High Court in the case of Santani Sales Organization (Supra). It has been held therein as follows: 24. Accordingly, we would allow the present writ petition and set aside the order and direction of the Tribunal that the petitioner must deposit additional 10% of the duty and penalty in dispute for the second appeal to be heard and adjudicated. We would also quash the circul....
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....d claim pursuant to setting aside of the demand/ penalty has to be sanctioned with the interest at the said deposit @ 17.5 % of duty and penalty deposited instead of sanctioning the refund of mere 10% of duty and penalty. 9. In view of the above discussion, as far as, first point of adjudication is concerned, the Adjudicating Authority below is held to have committed an error while not sanctioning the refund claim of entire amount of pre-deposit i.e. @ 17.5% of duty and /or penalty involved, that too, along with the interest. Issue No.-(ii) With respect to the second point of adjudication, it is observed that recovery of sums due to the Government is dealt with under section 11 of Central Excise Act, 1944. The said section has undergone an amendment in the year 2013. It is necessary to have a look on pre-amendment and post amendment section 11 of Central Excise Act. The pre-amendment section reads as follows:- "11. Recovery of sums due to Government. - In respect of duty and any other sums of any kind payable to the Central Government under any of the provisions of this Act or of the rules made thereunder, the officer empowered by the Central Board of Excise and Customs consti....
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.... the hands or under disposal or control of such other officer, or may recover the amount"; (b) after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely :- "(2)(i) The Central Excise Officer may, by a notice in writing, require any other person from whom money is due to such person, or may become due to such person, or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central Government either forthwith upon the money becoming due or being held, or at or within the time specified in the notice, not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount; (ii) every person to whom a notice is issued under this sub-section shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before payment is made, n....
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.... as follows:- "I find that the finding recorded by the first appellate authority is correct and in consonance with the law laid down by Hon'ble High Court of Karnataka in the case of Stella Rubber Works (supra). With respect I reproduce the ratio which is in Para 4. I also find that this Bench in the case of Mars International followed Para 4 of the judgment of Hon'ble High Court, in which it has been held as under : - "4. The learned counsel appearing for the revenue contended that by virtue of Section 11 of the Central Excise Act, 1944, the revenue was empowered to adjust the amounts due to the revenue by way of interest out of the amount due by the Department to the assessee by way of rebate. Therefore, the Tribunal committed a serious error in interfering with the said order of adjustment and therefore he submits that the impugned order requires to be interfered with. Section 11 of the Act would deal with the recovery of sums due to the Government reads as under : - ...... ...... ...... ...... A perusal of the aforesaid provision makes it very clear that if any duty or other sums due to the Central Government under the Act and recovery of certain amounts, if any ....