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2015 (2) TMI 83 - AT - Central ExciseAdjustment of refund with interest due on belated duty - Held that:- Advocate has drawn my attention to letter dated 29-3-2012 addressed by the Superintendent to the appellant giving details of interest against which the balance amount of rebate of ₹ 8,01,573/- was adjusted. The said letter also mentions that “higher officers at the relevant time were of the opinion that no show cause notice be issued for recovery of interest, hence no show cause notice was issued for the above amount. Learned Advocate has also made a statement at bar that even subsequent to the said letter, they have not been issued a show cause notice for confirmation of any demand of interest. It is well settled law that any demands from an assessee are required to follow the principle of natural justice, which includes issuance of show cause notice, affording a reasonable opportunity to the assessee to put forward its case and adjudicating the matter thereof. Such type of interest confirmation without following due principles of natural justice cannot be appreciated inasmuch as they represent only one sided view of the Revenue. As such, the adjustment of sanctioned rebate claims against the interest amount, which never stand adjudicated by the department, cannot be upheld in terms of law declared by the Hon’ble Karnataka High Court [2011 (3) TMI 571 - KARNATAKA HIGH COURT ]. Accordingly, all the appeals are allowed to the extent of rebate claim of ₹ 8,01,573/- with consequential relief to the appellants.
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