Sanctioned refund cannot be adjusted against unconfirmed demand.

Bharat   Sanchar Nigam  Ltd.  vs, Commissioner     of C. Ex.,  Jaipur [2014] (36) STR  1054  (Tri.  Del.) 

 

FACTS:

The Appellant was given a SCN proposing rejection of refund claim. Thereafter, a corrigendum was issued to the effect. That CENVAT Credit on capital goods was also liable to be rejected as it was availed based on a document issued by their Head Office   which was not a registered dealer. Ultimately, refund was sanctioned of excess   amount   paid after deducting CENVAT Credit claimed on capital goods. Commissioner (Appeals) also upheld such adjustment of unconfirmed demand. Accordingly, present appeal was made before Tribunal.

HELD:

Tribunal observed that the Assistant Commissioner had sanctioned entire refund claim and thereafter, deducted unconfirmed demand.  Further, no Show Cause Notice was issued for inadmissibility of CENVAT Credit. The corrigendum could not take color of a SCN u/s. 73 of the Finance Act, 1994 since it is neither mentioned that it was issued u/s. 73 nor did it contain any grounds to state that the demand was not hit by time bar. It merely stated that the said amount appeared to be not admissible  and straightaway  called  upon to show cause  as to why the refund claim should not be rejected.

Accordingly,  the  Tribunal  held  that  confirmed  demand can  be  adjusted  from  refund  amount   but  there  was no legal authority to adjust unconfirmed demand from refund amount.