TMI Blog2006 (5) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... mand, no finality has been reached. To put in other words, those demands cannot be called as arrears. There is a possibility that these demands could be set aside by the Commissioner (A) or the Tribunal or any other judicial forum. That is why large number of decisions hold that refund cannot be adjusted against the demands which are sub-judice. In the present case, the action of the authorities in adjusting the refund is against the legal provisions. Section 11 should be involved only when the demands have reached finality and should not be invoked even at the initial stage. Section 11BB provides interest for delayed refunds. This is squarely applicable to the present case. The Commissioner (A) has not at all given any reason as to why the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affirmed that so long as the original order has not been set aside by the concerned authorities in the absence of stay order, the proper officer was justified in realization of outstanding arrears of revenue as per law. 3. She however held that the Revenue took prompt action in refunding all the amounts except two viz., Rs. 13,184/- and Rs. 6,891/-adjusted earlier to refundable as a result of disposal of the appeals. She held that these amounts are payable to the appellants. As regards interest, the Commissioner observed that the provisions of Section 11BB are not invokable in the context of the case. The appellants are aggrieved over the Order-in-Appeal. 4. Shri C.T. Krishna Murthy, learned Advocate appeared for the appellants and Shri R K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject to payment of interest under Section 11BB of Central Excise Act, 1944. It is only when the demand is final, it will be arrears and is adjustable under Section 11 of Central Excise Act, 1944. (iv) The Commissioner has not given proper reasons for rejecting the claim of interest under Section 11BB. (v) The Commissioner (A) relied the TISCO S case cited supra. At a much latter stage, the Board s Circular No. 396/29/98 ex. dated 2-6-1998 clarifying that pending disposal of the stay application with the Commissioner (A) coercive action should not be initiated for recovery of dues was issued. The refund order was passed on 16-11-1998 by the Asst. Commissioner, Hyderabad-IX Division. The Departmental officers are bound by the Circulars issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e refund due against confirmed demands under Section 11 of the Central Excise Act. Further, he reiterated the Order-in-Appeal. 8. We have gone through the records of the case carefully. The learned Advocate for the appellants has cited a number of decisions wherein it is held that the refund amount due to the party cannot be adjusted against demands which are under challenge in the appellate fora. In the present case, even though the refund order for an amount of Rs. 15,73,149/- was passed on 16-11-1998. The same was not actually paid to the appellants and adjusted against some pending demands under Section 11 of the Central Excise Act 1944. Section 11 is reproduced below. SECTION 11. Recovery of sums due to Government. - In respect of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant. But the appellants by virtue of certain Orders-in-Original owed money to the Government. The important thing to be noted is that these amounts decided by the Orders-in-originals were not final. Every Order-in-Original can be appealed. Therefore, at the first stage of confirmation of a demand, no finality has been reached. To put in other words, those demands cannot be called as arrears. There is a possibility that these demands could be set aside by the Commissioner (A) or the Tribunal or any other judicial forum. That is why large number of decisions hold that refund cannot be adjusted against the demands which are sub-judice. In the present case, the action of the authorities in adjusting the refund is against the legal pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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