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2016 (1) TMI 882 - CESTAT MUMBAI

2016 (1) TMI 882 - CESTAT MUMBAI - 2016 (335) E.L.T. 163 (Tri. - Mumbai) - Adjustment of amounts of refund due to the respondent against confirmed dues of penalty - FAA deleted the adjustment - Held that:- Section 11 of the Central Excise Act does not provide for adjustment of money due towards the amount due to Revenue. - The first appellate authority has justifiably held that the adjudicating authority could not have adjusted the amount of ₹ 10 lakhs towards the penalty imposed on the re .....

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AV/172/2010 dated 17.8.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai-I. 2. Heard both sides and perused the records. 3. The issue involved in this case is regarding the adjustment of amounts due to the respondent against confirmed dues. 4. The respondent were visited by the authorities and on such survey it was noticed that there was short payment of duty and were advised to deposit ₹ 10 lakhs, which was complied on 25.9.2004 before issue of show-cause notice. A show- .....

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e first appellate authority. The first appellate authority set aside the order-in-original dated 6.2.2006. Revenue is aggrieved by the said order and filed the present appeal before this Tribunal. 5. It is the submission of learned AR that the findings of the first appellate authority is not legal and proper, as provision of Section 11 of the Central Excise Act, 1944 empowers the Department to adjust refund amount against government dues. It is his submission that ultimately the penalty of ͅ .....

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lso rely upon the judgment of the Tribunal in the case of Mahavir Steel Rolling Mills Vs. Commissioner of Central Excise Hyderabad - 2010 (251) ELT 69 (Tri-Bang) for the same proposition, as also in the case of Global Stores (P) Ltd. - 2009 (236) ELT 149 (Tri-Del). 6. Ld. Counsel would submit that the issue is no more res integra as Hon'ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore-III Vs. Stella Rubber Works (Unit-II) - 2012 (275) ELT 04 (Kar) was cons .....

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of the submissions made by both sides, I find that the first appellate authority has justifiably held that the adjudicating authority could not have adjusted the amount of ₹ 10 lakhs towards the penalty imposed on the respondent by Order-in-Original dated 2.11.2005. The findings recorded by the appellate authority are reproduced as under:- "8. I find that the adjudicating authority admits that appeal has been filed against Order-in-Original No. 12/2005 but has appropriated the time o .....

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t be said that the arrears were clear cut arrears not restricted or not subjected to any further judicial proceedings. Therefore the appropriation is not in order and the amount of ₹ 10 lakhs should have been sanctioned in cash. 9. The adjudicating authority has then held that no interest is liable to be paid as the amount was not duty but a deposit made by their own volition. I find that all amounts refunded by the Central Excise department are governed by the provisions of Section 11B. S .....

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d the original deposit of ₹ 10 lakhs was set aside by the Tribunal on 17.06.2003 in terms of explanation to Section 11BB, interest on the refund of ₹ 10 lakhs is payable within three months from the date of the Tribunal's Order i.e. 17.06.2003." 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 rat .....

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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 person owing money to the assessee, the revenue may proceed against such person and re .....

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