0111 el 4.1 4o' ti irglq qrch 9 3T64-1 ,416n4.4

OFFICE OF THE CORI! BONERF CENT CISE, AHMEDABAD4

1 qff

@M ©

3fficraea< 380 ©15 .

EAMOVINKE @CM

F.No. V.52&55/15-12/Ashima/0A-1/2011-12

311t/T *t FTfra: Date of Order : 09.01.2013 71-# W# : Date of Issue : 09.01.2013

gems 74247 / Passed by: Sri D.S. NEGI, ADDITIONAL COMMISSIONER *******************************************************************

.71.R" 317eIr #./Order-In-Original No.: O1/ADDITIONALCOMMISSIONER/2013 ****************************************************************

Q-16 cri s (Tit) aiTtU off f+--zrr d I I I 3-41t

(3-dt) c.44%-1d I cl 3-urzn-d-r a-rt t-

This copy is granted free of charge for private use of the person(s) to whom it is sent.

*4-1 311-t3T tf 317q76 ch'4c11 cI6

(3-7f1W) ,J'147:1 6 t-6-4171- 60-4 I d, 31tdrdTer,

3164-4104-15 .4-10h ci I t. I 3-T 3T c tralg

3-1TRT d 1 J4 3V--raT 3-1-21-dT 6 ,4) Ild-RT Arca' d I i d-116

vrftu -i -40-4Q 2.00/- -ra-e41QA1w.4 eon T r1'.6-u

Any person deeming himself aggrieved by this Order may appeal against this order in Form E.A.1 to Commissioner (Appeals), Central Excise, Central Excise Bhavan, Near Government Polytechnic, Ambawadi, Ahmedabad -15 within sixty days from

date of its communication. The appeal should bear a court fee stamp of Rs.2.00/-

only.

3TcrfW Ai T1 A- 17i W-1 H. 5-.V. -1 gr ck) Vii:t7 34-1'-k 1721

30-11d, g cch (311:11M-) PeicHiciA, 2001 1 -zr-F 3 31:1 317d;4=FR 3rcri- 311-

q7d-R-r 64-ciiM7 f+-Cr aTA- VrItCr I TrrzT ml f+-41- :

The Appeal should be filed in form No. E.A.-1 in duplicate. It should be filed by the appellants in accordance with provisions of Rule 3 of the Central Excise (Appeals) Rules, 2001. It shall be accompanied with the following:

61-ci 3Tcfrff tr

Copy of the aforesaid appeal.

u 34,1 3iTtU SPITfata• Ced'WZI- 610-fl VTit(r It fd-k-g" ITtifiR" *I" zit t) NMI ict-ci 311-aT Q- 3771- 1;11 . 2.00/- 0-41Nl1z1 !1,- ft-TT 31-W1 MIT )0-11 qlitV I

Copies of the Decision (one of which at least shall be certified copy of the order appealed against) or copy of the said Order bearing a court fee stamp of Rs.2.00/-.

Ti-OY/Reference : 4F131t i-jj4 Show Cause Notice F.No. V.52&55/15-12/Ashima/0A-I/2011-12 dated 11.05.2011 issued to M/s Ashima Dyecot Ltd., Texcellence Complex, Khokhara Mehmedabad, Ahmedabad-380021.

2

3 V.52&55/15-12/Ashima/0A-1/2011-12

BRIEF FACTS OF THE CASE:

M/s. Ashima Dyecot Ltd. (herein after called "the assessee") are engaged in the

manufacture of 100% Cotton Dyed and Finished Fabrics, an Excisable goods, duly

classifiable under Tariff Item Number 52 and 55 of the First Schedule appended to the

Central Excise Tariff Act, 1985. The assessee had exported Cotton Bleached Fabrics &

Finished Fabrics falling under Tariff Item Number 52 of the Central Excise Tariff Act,

1985 on payment of Central Excise Duty at the rate specified in the Notification No.

29/2004-CE dated 09.07.2004 through M/s. Ashima Limited, Ahmedabad and M/s.

Durham Spintex & Holding Pvt. Ltd and had filed two Rebate claims (i) on 30.04.2010

and (ii) on 19.05.2010, 21.05.2010, 28.05.2010 and 14.07.2010 for a sum of (i) Rs.

4,31,318/- and (ii) Rs. 4,64,876/- in terms of the Rule 18 of the Central Excise Rules,

2002 read with the Notification Number 19/2004-CE (NT) dtd.06.09.2004. The Assistant

Commissioner, Central Excise, Division-I, Ahmedabad-I had sanctioned both the claims

vide 010 No. 51/AC/Rebate/2010 dated 29.07.2010 and 010 No. 53 to

56/AC/Rebate/2010 dated 18.08.2010 and adjusted Rs. 4, 31,318/- and Rs. 4, 64,876/-

against the arrears arising against the said assessee out of 01A No. 313/2009 and 010

No. 21/JC/2010 under Section 11 of the Central Excise Act, 1944.

2. The assessee had preferred an appeal before Commissioner (Appeal) against

the said 010s passed by the Assistant Commissioner, Central Excise, Division-I,

Ahmedabad-I on the grounds that the amount sanctioned has been wrongly adjusted

against the arrears arising out of OIA No. 313/2009, as the Hon'ble CESTAT vide their

Order No. S/987/WZB/AHD/2010 dated 25/08/2010 had granted un-conditional stay of

the said OIA. The Commissioner (Appeal) vide OIA No. 348 to 349/2010(Ahd-

1)CE/MM/Commr(A)/Ahd dated 18.10.2010 issued on 20.10.2010 directed to grant the

sanctioned rebate to the claimant if no stay has been obtained by the department

against the said order No. S/987ANZB/AHD/2010 dated 25/08/2010 of the CESTAT and

allowed both the appeals. Accordingly, the assessee has filed a refund claim dated

21.09.2010 received by the divisional office on 24.09.2010. The Assistant

Commissioner, Central Excise, Division-I, Ahmedabad-I had sanctioned Refund Claim

for Rs. 8, 96,194/- vide his 010 No. 014/AC/REF/2010 dated 03.01.2011.

3. The department has filed an appeal before Hon'ble CESTAT on 11.01.2011

against the OIA No. 348 to 349/2010(Ahd-I)CE/MM/Commr(A)/Ahd dated 18.10.2010

passed by the Commissioner (Appeal) on the grounds mentioned below:

3(1). Section 11 of the Central Excise Act, 1944, provides that in respect of duty

and any other sums of any kind payable to the Central Government under the Act, the

officer empowered may deduct the amount so payable from any money owing to the

person from whom such sums is recoverable or due, which may be in his hands or

under his disposal or control. In the present case, a sum of Rs 11, 18,128/- became

payable to the Central Government following the Order-in-Appeal No. 313/2009 (Ahd-

1)CE/RLM/Commr (A)/Ahd, dated 23.10.2009, passed by the Commissioner (Appeals),

Ahmedabad, and the Order-in-Original No. 21/JC/2010 dated 06.04.2010, passed by

the Joint Commissioner, Central Excise, Ahmedabad-I.

3(2). At the time of passing the Order-in-Original No. 51/AC/Rebate/2010 dated

29/07/2010 and 53 to 56/AC/Rebate/2010 dated 18.08.2010, the dues recoverable were

not under Stay as the Stay Order No. S/987/WZB/AHD/2010 came to be issued by the

CESTAT only on 25.08.2010. Thus, there was no bar in law, in appropriating the

amount of rebate sanctioned, against the government dues.

3(3). In paragraph 8 of the Order-in-Appeal, the Commissioner (Appeals) has relied

on the Board Circular No. 788/21/2004-CX dated 25.05.2004 to hold that the field

Officers should refrain from taking coercive action till the period of six months of filing a

stay petition before the CESTAT or till the date of disposal of the petition whichever is

earlier, is over.

3(4). It is submitted that the aforementioned Circular has been issued following

references to the CBEC regarding the course of action to be taken when a stay

application filed against an Order-in-Original passed by Commissioner is pending with

the Tribunal. In the said Circular, it is amply clarified that the instructions ( referred to by

the Commissioner (Appeals) ) in this clause relate to only stay application filed with first

stage appeals and not to those in further appeals (i.e. only in respect of Stay

applications filed against the Orders-In Original passed by the Commissioners).

Therefore, reliance on the said Circular is misplaced and the Orders-in-Appeal require

to be set aside on this ground alone.

3(5). Since any failure in adhering to time limit specified for disposing rebate claims

would invite the burden of interest, the claims could not have been kept pending for

disposal of stay application.

3(6). The following decisions involving identical issue endorse the stand of the

department that the Assistant Commissioner has correctly adjusted the rebate amount

against the dues:

(i) Commissioner of Central Excise, Tirupathi Vs Annapurna Industries Ltd, reported at

2006 (200) ELT 417 (Tri Bang), wherein, in para 5 of the order, it was held as follows:

5 V.52&55/15-12/Ashima/0A-1/2011-12

"We have heard both the parties. The Original authority appropriated the refund amount

towards the pending arrears arising out of the Order-in-Appeal dt 19-12-2004 passed by

the Commissioner (Appeals) under Section 11 of the Central Excise Act, 1944. When

the Original authority appropriated the respondent's refund towards arrears, the Order-

in-Appeal dated 19-2-2004 was not at all stayed. Hence during that point of time, the

action of the Original authority was legal and proper. He could not have passed a

different order anticipating the stay of the Order-in-Appeal dated 19-2-2004 by the

CESTAT. He has rightly complied with Section 11 of the Central Excise Act, 1944.

There is no infirmity in the order of the Original authority. In these circumstances, the

Commissioner's (Appeals) order allowing the appeal of the respondents is not legal.

Therefore we set aside the impugned order of the Commissioner (Appeals), uphold the

order of the Original authority and allow the Revenue's appeal."

(ii) The Hon. High Court, Gujarat, while disposing the Special Civil Application No. 2642

of 2009 in the case of M/s J & J Plast Versus Union of India, held that:

"Learned counsel for the petitioners submits that the petitioners are statutorily

entitled to prefer an appeal before the Tribunal within a period of 90 days from the

receipt of the appellate order and such an appeal shall be accompanied by an

application seeking stay against the recovery. That till the point of time such an

appeal and stay application are filed before the Tribunal, respondent authority must

be directed to stay its hands from recovering the outstanding dues. It is submitted

that respondent authority has orally threatened to attach the factory, plant and

machinery and other assets of the petitioners which will result in closing down the

unit of the petitioners. The learned counsel in this context placed reliance on Circular

No. 788/21/2004-CX., dated 25.5.2004 as reported in 2004 (167) E.L. T. (T46).

It is not possible to accept the contentions raised by the petitioners. The

Circular in question on which reliance has been placed is in relation to stay of

recovery qua first stage appeals, and the reference to Tribunal in the said circular is

in context of an order in original made by Commissioner against whose order a

direct appeal lies to the Tribunal. It is not possible to read a sentence of the Circular

out of context as the petitioners desire.

Even otherwise there is no question of interfering in recovery proceedings

without entering into the merits of the controversy as the same would amount to

determining the merits of the controversy even without going into the merits of the

matter."

4. Whereas, it appears that in terms of the above, the refund claim for Rs.

8,96,194/- sanctioned by the Assistant Commissioner vide his 010 No.

014/AC/REF/2010 dated 03.01.2011 is erroneous. Hence, the said amount of refund

sanctioned to the said assessee is required to be recovered from them and adjusted

against the arrears arising out of said OIA No. 313/2009 and 010 No. 21/JC/2010 under

provisions of Section 11 of the Central Excise Act, 1944

5. Therefore, M/s. Ashima Dyecot Ltd., situated at Texcellence Complex, Near

Anupam Cinema, Khokhara, Mehmedabad, Ahmedabad-380021 was issued subject

show cause notice and were called upon to Show Cause as to why:

(i) Refund claim of Rs. 8, 96,194/- sanctioned vide 010 No. 014/AC/REF/2010

dated 03.01.2011 should not be treated as erroneously sanctioned and the said

amount should not be recovered from them under Section 11A of the Central

Excise Act, 1944, and why the same should not be adjusted against the arrears

arising out of OIA No. 313/2009(Ahd-I)CE/RLM/Commr(A)/Ahd dated 23.10.2009

and 010 No. 21/JC/2010 dated 06.04.2010, under Section 11 of Central Excise

Act, 1944.

DISCUSSIONS AND FINDINGS:

7. I have carefully gone through the case records. I find that the said assessee had

filed two Rebate claims (i) on 30.04.2010 and (ii) on 19.05.2010, 21.05.2010,

28.05.2010 and 14.07.2010 for a sum of (i) Rs. 4,31,318/- and (ii) Rs. 4,64,876/- in

terms of the Rule 18 of the Central Excise Rules, 2002 read with the Notification

Number 19/2004-CE (NT) dtd.06.09.2004. The Assistant Commissioner, Central Excise,

Division-I, Ahmedabad-I had sanctioned both the claims vide 010 No.

51/AC/Rebate/2010 dated 29.07.2010 and 010 No. 53 to 56/AC/Rebate/2010 dated

18.08.2010 and adjusted Rs. 4, 31,318/- and Rs. 4, 64,876/- against the arrears arising

against the said assessee out of OIA No. 313/2009 and 010 No. 21/JC/2010 under

Section 11 of the Central Excise Act, 1944.

8. The assessee had preferred an appeal before Commissioner (Appeal) against

the said 010s passed by the Assistant Commissioner, Central Excise, Division-I,

Ahmedabad-I on the grounds that the amount sanctioned has been wrongly adjusted

against the arrears arising out of OIA No. 313/2009, as the Hon'ble CESTAT vide their

Order No. S/987ANZB/AHD/2010 dated 25/08/2010 had granted un-conditional stay of

the said OIA. The Commissioner (Appeal) vide OIA No. 348 to 349/2010(Ahd-

1)CE/MM/Commr(A)/Ahd dated 18.10.2010 issued on 20.10.2010 directed to grant the

sanctioned rebate to the claimant if no stay has been obtained by the department

against the said order No. S/987/WZB/AHD/2010 dated 25/08/2010 of the CESTAT and

allowed both the appeals. Accordingly, the assessee had filed a refund claim dated

21.09.2010 received by the divisional office on 24.09.2010. The Assistant

Commissioner, Central Excise, Division-I, Ahmedabad-I had sanctioned Refund Claim

for Rs. 8, 96,194/- vide his 010 No. 014/AC/REF/2010 dated 03.01.2011.

7 V.52&55/15-12/AshimaJOA-1/2011-12

9. However, the department had filed an appeal before Hon'ble CESTAT on

11.01.2011 against the said 01A No. 348 to 349/2 010(Ahd-I)CE/MM/Commr(A)/Ahd

dated 18.10.2010 passed by the Commissioner (Appeal) in favour of the assessee. In

view of the same, it appeared that the refund of Rs 8, 96,194/- sanctioned to them was

erroneous and so the same was required to be recovered from the said assessee and

adjusted against the arrears arising out of 01A No. 313/2009(Ahd-

I)CE/RLM/Commr(A)/Ahd dated 23.10.2009 and 010 No. 21/JC/2010 dated

06.04.2010, under Section 11 of Central Excise Act, 1944. Accordingly the impugned

show cause notice was issued to the said assessee,

10 I further find that Hon'ble CESTAT vide their order No. A/1556-

1557NVZB/AHD/2012 dated 28/9/2012 had rejected the appeal filed by the department.

The said order of the Hon'ble CESTAT is accepted by the department on monetary limit

ground and as such no appeal is thus preferred against the same. Thus, in light of said

facts, the impugned show cause notice issued to M/s. Ashima Dyecot Ltd cannot

survive any further.

11. Accordingly, I pass the following order:

ORDER

I drop the proceedings initiated against M/s. Ashima Dyecot Ltd Ahmedabad

vide Show Cause Notice dated 11/05/2011 issued from F.No. V.52&55/15-

12/Ashima/0A-1/2011-12, in light of the aforementioned order passed by the Hon'ble

CESTAT.

[D.S. NEGI] ADDITIONAL COMMISSIONER,

CENTRAL EXCISE,

By Regd. Post A.D. AHMEDABAD-I

F. No. V.52&55/15-12/Ashima/0A-1/2011-12 Dated: 09/01/2013

To, M/s. Ashima Dyecot Ltd., Texcellence Complex, Khokhara Mehmedabad , Ahmedabad-380021

Copy to:

1 The Commissioner, C.Ex., A'bad-I [ Attn. A.G. C.Ex. RRA, A'bad-l] 2 The Assistant Commissioner, Central Excise, Division-I, Ahmedabad-I 3,, The Superintendent, Central Excise, Range - I, Division-I, Ahmedabad-I

The Superintendent (Systems) Central Excise, Ahmedabad-I The Guard File

Page 1Page 2Page 3Page 4Page 5Page 6Page 7Page 8