1. This appeal has been filed by the appellant against the Order-in-Appeal No. 20/Pat/CEx./Appeal/2015 dated 14.05.2015 passed by Commr. (Appeals) of Central Excise, Patna.
2. M/s. Lucky Biscuits Company, the appellant herein, are engaged in the manufacture of biscuits on behalf of M/s. Parle Biscuits Pvt. Ltd., under their brand name. It is the case of the appellant that till 3.5.2007, biscuits were chargeable to duty and thereafter, the same with the retail sales price of less than Rs. 100/- per Kg. are exempt from duty vide Notification No. 3/2006-CE dated 01.03.2006, Sl. No. 18A and later under Notification No. 12/2012-CE :dated 17.03.2012. The appellant had un-utilized balance in their PLA of Rs. 1,33,867/-, which was claimed as refund vide letter dated 19.08.2014. The Assistant Commissioner of Central Excise, Division II, Patna vide Order-in-Original No. R-01/Patna II/2014-15 dated 10.02.2015 sanctioned the refund. The discussions and findings of the said Order, are reproduced below:
Discussion and Findings:-
I have carefully gone through the case records pertaining to this refund claim of unutilized amount in PLA accounts amounting to Rs. 1,33,867/-. I find that this refund claim has been filed by the assessee as the refund amount remained unutilized for the last four to five years. As per Notification No. 03/06 dated 01.03.06, as amended, and Notification No. 12/12-CE :dated 17.03.2012, Central Excise duty on Biscuits cleared in packaged form, having per Kg. retail sale price equivalent not exceeding Rs. 100/- is Nil. The Range Officer, Patna City Range vide in his verification on report vide letter C. No. CE-20/Refund/Lucky/10/P City/2014-15/724 dated 02.12.2014 and 620 dated 10.11.2014 confirmed that there is a balance of amount of Rs. 1,00,897/- in the PLA account of M/s. Lucky Biscuit Co., Patna City, A/C. Parle Biscuit (P) Ltd. and Rs. 32,970/- in the PLA account of M/s. Lucky Biscuit Co. Thus, as per R.O., Patna City there is un-utilized credit of Rs. 1,33,867/- in the account of the assessee. The Deputy Commissioner, Central Excise & S. Tax, Division I, Patna vide his letter C. No. V(30)09/CEX/2013/4306 dated 11.12.2014 suggested to adjust refund amount of Rs. 1,33,867/- against interest amount of Rs. 9,11,174/- due from M/s. Lucky Biscuit Co. Patna City as the duty amount of Rs. 18,94,488/- and penalty amount Rs. 18,94,488/- confirmed by O.I.O. No. 13/MP/ADC/2013 dated 30.10.2013, was realized by attaching bank account of M/s. Lucky Biscuit Co. Patna City.
I find that this is a case of un-utilized credit in PLA account and there is no time limit for refund of PLA amount and case of unjust enrichment is not applicable here.
The claim has been sanctioned on the basis of the records submitted by the assessee, as well as, the records available in this office and the scrutiny report of the jurisdictional Range Officer and it has been observed that an amount of Rs. 1,33,867/- is still in PLA account of the assessee. But the Central Excise & Service Tax Division I, Patna certified that there is recoverable arrears of Rs. 9,11,174/- pending against the said assessee.
Since there is outstanding Govt. dues of Rs. 9,11,174/- against M/s. Lucky Biscuit Co., Patna City, the sanctioned refund amount of Rs. 1,33,867/- may be adjusted against the interest amount of Rs. 9,11,174/-.
In view of the above facts and findings, I hereby sanction refund of un-utilized PLA amount of Rs. 1,33,867/- (Rupees one lakh thirty three thousand eight hundred and sixty seven) and order to adjust the said amount against recoverable arrear of Rs. 9,11,174/- from M/s. Lucky Biscuit Co., Patna City.
Being aggrieved, the appellant filed the appeal before the ld. Commissioner (Appeals), who upheld the Order-in-Original and dismissed their appeal. Hence the present appeal.
3. Shri Jatin Mahajan, ld. Advocate, appearing for the Appellant Company, submitted that the duty amounting to Rs. 18,94,488/- and the equal amount of penalty confirmed by the Order-in-Original No. 13/MP/ADC/2013 dated 30.10.2013, was realized by attaching bank account of the appellant. He further submitted that the sanctioned refund amount of Rs. 1,33,867/- have been adjusted towards interest liability of Rs. 9,11,174/- calculated on the duty demand of Rs. 18,94,488/-.
4. Shri K. Choudhary, ld. A.R. for the Revenue reiterated the order of the ld. Commissioner (Appeals).
5. Heard both sides and perused the appeal records. The issue involved in the instant case is whether the appropriation of refund claim after sanctioning the same, against the confirmed demand, is proper or legal, in a case where an appeal has been filed and the same is pending. I find that the Refund Sanctioning Authority, Asstt. Commissioner of Central Excise & Service Tax, Division II, Patna, found that there was a recoverable arrears of Rs. 9,11,174/- pending against the appellant on account of interest calculated on the disputed demand, which was already recovered by the Department along with equal penalty by attaching bank account of the appellant. He ordered for adjustment of refund amount against the
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said amount. I find that the adjustment of refund sanctioned by the Adjudicating Authority and adjusted towards interest liability is pre-mature. When the matter is pending and the entire amount of duty liability has been recovered along with amount of penalty, there was no occasion to adjust the sanctioned refund against the interest liability. I hereby set aside the impugned order and direct to release the refund amount already sanctioned to the appellant within 30 days from the date of receipt of this order. 6. Appeal is disposed of in the above terms.