COMMISSIONER OF CENTRAL EXCISE Vs. DAY AND CO.

JUDGEMENT

(1.) THERE was an adjudication against the respondent by order -in -original No. 02/2012 -13 dated 23 -7 -2012 raising excise duty demand of Rs. 49,16,667/ - with equal amount of penalty imposed under Rule 17 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and interest under Section 11AA of Central Excise Act, 1944 (Ref. page 52 of the appeal folder) imposed. After that adjudication giving rise to above demand, in order to recover the demanded amount order No. 124/R/2012 dated 25 -7 -2012, was passed to consider refund application of the respondent pending before ld. adjudicating authority. Out of the refund of Rs. 1,28,80,000/ - sanctioned in terms of that order, ld. Adjudicating authority appropriated an amount of Rs. 1,08,17,745/ - towards central excise duty of Rs. 49,16,667/ -, penalty of Rs. 49,16,667/ - and interest of Rs. 9,84,411/ - which arose by adjudication order dated 23 -7 -2012. Apart from appropriation, he also ordered that balance amount of Rs. 20,62,255/ - be paid to the appellant by crossed cheque in its favour (Ref. page 44 -45 of the appeal folder). When appropriation as above was ordered respondent went in appeal to ld. Commissioner (Appeals) challenging the appropriation. Such appeal of the respondent was disposed by ld. Commissioner (Appeals) by an order dated 14 -11 -2012 holding that ld. Adjudicating authority should not have appropriated refunded amount to the extent of Rs. 1,08,17,745/ -. Accordingly the respondent succeeded before ld. Commissioner (Appeal).

(2.) REVENUE came in appeal before Tribunal submitting that the decision taken by appellate authority as above was erroneous since any refund due on the date of existence of demand is adjustable against such demand not discharged by an assessee. Revenue in its ground of appeal has pleaded that the respondent in the mean time had surrendered its registration on 15 -3 -2012. It has also been brought out in the grounds of appeal that there was huge liability recoverable from the respondent and there was serious nature of breach of law by Respondent breaking seal of pan masala machine which came to notice of the department. When Revenue's interest was jeopardised by the respondent, adjustment of part of refund towards adjudicated demand was correct.

(3.) HEARD both sides and perused the records.