A.S. Oka, J. -
(1.) The submissions of the learned counsel appearing for the parties were heard yesterday. The appeals were admitted on 14th February 2008. As the facts of the appeals are more or less similar, the appeals have been admitted on the same substantial questions of law. The appeals have been admitted on the following substantial questions of law:-
(i) Whether the amount demanded by the Superintendent of Central Excise as duty of Central Excise by a mere letter DD2 without issuance of show cause notice under Section 11A(1) of the Central Excise Act, 1944 and without determination of the Central Excise duty due under Section 11A(2) of the Central Excise Act, 1944 and without granting any opportunity of being heard in the matter is an amount which can be recovered as Government dues under Section 142 of the Customs Act, 1962 as Central Excise duty due to the Government?
(ii) Whether in the facts and circumstances of the case and in law the demand of duty under the said DD2, dated 3rd September 1986 or any part thereof could be adjusted against the sanctioned rebate claim?
(iii) Whether in the facts and circumstances of the case and in law any interest can be charged on the demand of duty made under the DD2, dated 3rd September 1986 issued by the Superintendent of Central Excise?
(2.) For the sake of convenience, we are referring to facts of Central Excise Appeal No. 77 of 2007. By a letter dated 3rd September 1986 (styled as DD2), the Superintendent of Central Excise Range-VII, Division-III, Thane demanded from the appellant a sum of Rs. 8,87,294.90 being differential excise duty of 3% as mentioned in the said letter. Being aggrieved by the said demand, the present petitioner filed Writ Petition No. 1299 of 1988. The said Writ Petition was admitted for final hearing and interim order was passed in favour of the appellant subject to appellant depositing a sum of Rs. 7 lakhs in this Court. The said Writ Petition was dismissed for default by the order dated 4th October 1999. It is an admitted position that the appellant did apply for restoration of the said Writ Petition which was dismissed for non-prosecution.
(3.) On 16th April 2004, the appellant filed an application claiming rebate of Rs. 3,92,934/- on the ground that the appellant has paid Central Excise duty on export assignments which were exported out of India under Rule 18 of the Central Excise Rules, 2002. By order dated 7th June 2004, the Assistant Commissioner of Central Excise, Belapur-IV, Division-Belapur sanctioned the rebate claim of Rs. 3,92,939/-. However in the operative part, he issued following directions : ORDER In view of the above I hereby sanctioned the rebate amount of Rs. 3,92,939/- (Rupees three lacs ninety two thousand nine hundred thirty nine only) to M/s. Mukund Ltd., Thane.
However. I find that there is a Govt. dues amounting to Rs. 5,06,056/- (duty Rs. 1,87,295.00 + Interest Rs. 3,18,761.00) as listed below arisen out of DD2, dated 3-9-1986 are still pending against them. The Hon'ble Bombay High Court has dismissed the assessee's Writ Petition No. 1299 of 1986 on 4-10-1999 against said DD2, dated 3-9-1986.
Total dues Rs. 1,87,295.00 + Rs. 3,18,761 = Rs. 5,06,056.00 (Rupees five lakhs six thousand and fifty six only). The Assistant Commissioner observed that the appellants have paid duty amount of Rs. 1,87,295/- vide debit Ex. No. 37, dated 23-3-2004 in CENVAT account. In this regard, the Range Superintendent informed the assessee that Cenvat credit availed/earned after the relevant months could be used for payment of duty. Therefore, I am inclined to adjust amount of Rs. 3,18,761/- (Rupess three lakhs eighteen thousand seven hundred sixty one only) against the Govt. dues i.e. interest arisen out on Govt. dues/duty amount of Rs. 1,87,295/- (details given above) total sanctioned Rebate amount of Rs. 3,92,939.00, as per Section 142 of the Customs Act, 1962 which is made applicable in the Central Excise cases vide Notification No. 48/97 C.E. (N.T.), dated 2-9-1997 and further order that the remaining sanctioned amount i.e. Rs. 74.178/- (Rupees seventy four thousand one hundred seventy eight only) shall be paid in cash through cheque after adjustment of Govt. dues from sanctioned rebate amount.