MARDIA CHEMICALS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issue involved in this Appeal filed by M/s. Mardia Chemicals Ltd. is whether the Revenue can adjust the duty amount due from the Appellants out of the amount of refund sanctioned to them. Shri R.S. Dinkar, learned Advocate submitted that demand of Rs. 35,05,293 was confirmed against them under Order -in -Original No. 408/Demand/97 dated 21.11.97; that the appellants had paid the said amount of demand by debiting through their RG 23 A Part II on 23.3.98; that on Appeal the Commissioner (Appeals) allowed their Appeal vide Order -in -Appeal No. 1160/2001 dated 4.1.2002; that thereafter they filed the refund claim with the Department; that the Assistant Commissioner has sanctioned the refund claim vide Order dated 13.11.2002; that he has however, adjusted the amount of Rs. 23,89,022 out of refund sanctioned to them against the demands confirmed by him under some other orders; that the Commissioner (Appeals) also under the impugned order has rejected their Appeal holding that in the light of Section 11 of Central Excise Act, the Adjudicating Authority has rightly adjusted outstanding Government dues from the given amount refundable to the appellants.

(2.) Learned Advocate, further, submitted that the Department should not have made the adjustment against the other confirmed demands and refund sanctioned to them should have been paid to the Appellants as the Assistant Commissioner has given a specific finding that the bar of unjust enrichment does not apply; that, further, in respect of five confirmed demands against which refund has been adjusted, have been allowed by the Appellate Tribunal vide different orders; that another demand of Rs. 6,88,454 is the subject matter of Appeal before the Tribunal which is still pending for decision; that, therefore the Commissioner (Appeals) ought to have not upheld the adjustment of their refund against the demands which stand set aside by the Tribunal.

(3.) Opposing the prayer Shri U. Raja Ram, learned Departmental Representative, submitted that Section 11 of the Central Excise Act empowers the Department to recover the sums due to Government from any money owing to the person from whom the sums are recoverable; that at the time of adjustment the demands had not been set aside and, therefore, the department was justified in terms of the provisions of Section 11 of the Central Excise Act to adjust against the amount of refund sanctioned to the Appellants; that as afterwards the demands have been set aside by the Tribunal, the Appellants are required to file fresh claims for refund of duty.