ORDER
G.A. Brahma Deva, Member (J)
1. This appeal has been filed by M/s. HPCL with reference to the impugned Order-in-Appeal No.
103/01, dated 30-8-2001 passed by the Commissioner of Customs (Appeals), Hyderabad.
2. Assistant Commissioner as per his order sanctioned the refund of Rs. 1,58,56,647/-. However, as noted by the Commissioner (Appeals) in exercise of the power conferred upon him under Section 11 of the Central Excise Act, 1944 read with Rule 230 of the Central Excise Rules, 1944, he adjusted the amount from the arrears due from the appellants as under :-
Arrear
amount due from the appellants
Amount
adjusted
(i)
Adj.
Order No. 19/99
Rs. 43,66,800/-
Fully
adjusted
(ii)
-do-
9/97
Rs. 59,400/-
-do-
(Hi)
-do-
4/99
Rs. 26/85,553/-
-do-
(iv)
-do-
84/97
Rs. 67,14,820/-
-do-
(v)
-do-
46/98
Rs. 55,93,570/-
Adjusted
Rs. 20,30,075/-
Â
Â
Â
Â
and
Â
Â
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balance Rs. 35,63,496/-
2. Shri Rajesh Chandra Kumar learned Counsel appearing for the appellants submitted that the Assistant Commissioner had no jurisdiction to appropriate the said amount at the relevant point of time. He submitted that appeals in respect of above demands were pending before the respective appellate authorities and in some cases stay has also been granted.
3. With reference to Sl. No. 1, he said that the appeal was pending before the CEGAT at that time and subsequently the party has succeed since the Tribunal has allowed the appeal in toto.
4. With reference to Sl. No. 2, he said that he could not substantiate the same due to lack of records.
5. With regard to Sl. No. 3 above, it was pointed out by him that the appeal was pending before the Commissioner and the Commissioner passed an interim order directing the party to deposit a sum of Rs. 50 lakhs against an amount of Rs. 76,85,553.67. The appellants have pre-deposited Rs. 50 lakhs in compliance with the stay order and accordingly there was a stay for the balance amount of Rs. 26,85,553/-.
6. He said that in respect of Sl. Nos. 4 and 5 the Commissioner has already granted relief as can be seen from the impugned order.
7. In support of his contention that the department was not justified in appropriating the above demands at that time, he heavily relied upon the decision of Madhya Pradesh High Court in the case of ‘National Industries reported in 2001 (134) E.LT. 616 (M.P.). Reliance is also placed by him in the case CCE, Jaipur v. Instrumentation Ltd. – 2002 (140) E.L.T. 518.
8. In the case of National Steel Industries Ltd., (supra), the High Court has observed that Section 11 of the Act provides for adjustment/deduction of the amount payable to a person from whom a sum is recoverable or due under the Act. In the instant case although some adjudication has been made against the petitioner, but the same is under challenge in appeal and his application for stay is also pending consideration before the Appellate Authority. Under these circumstances it cannot be said that the amount has become recoverable or due from him.
9. Smt. Radha Arun appearing for the Revenue submitted that she has nothing to say in respect of Sl. No. 3, nevertheless she justified the action of the Department in appropriating the amount of Rs. 43,66,800/- since there was no stay passed by the appellate authority at that point of time,
10. We have carefully considered the matter. We find that in the instant case, appellants have been challenging the above demands by way of appeals and they were pending before the respective appellate authorities. In respect of Sl. No. 1 as pointed out by the appellants Counsel, appeal was pending before the Tribunal at that time. As rightly observed by the Madhya Pradesh High Court, Section 11 of the Act provides for adjustment/deduction of the amount payable to a person from whom same is recoverable or due under the Act. In the instant case, though adjudication has been completed, the appellants have challenged the same by way of appeal and his application for stay was also pending before the Tribunal. In the facts and circumstances, it cannot be said that the amount has become recoverable or due from him. In the facts and circumstances Section 11 was erroneously applied by the adjudicating authority and the order passed by the authorities below on this issue deserves to be set aside. We do so accordingly. In the result appeal is allowed with consequential relief, if any.