G. Sankaran, Sr. Vice-President - (1.) THE facts of the case, briefly stated, are that M/s. Kutty Flush Doors and Furniture Co. (P) Ltd., (the appellants) were required to pay excise duty on flush doors manufactured by them, under Item No. 16B of the Central Excise Tariff Schedule (CET for short). THE matter was taken all the way to the Central Government who, in its Order-in-Revision Nos. 429-430/81 dated 5-6-1981 ruled that flush doors do not fall under Item No. 16B but under Item No. 68 of the CET. THE Government also observed in that Order as follows :- "THE Revision Application is accordingly allowed. This Order is, however, passed without prejudice to the Petitioner's liability for payment of duty, if any, on the impugned goods under Item No. 68 Central Excise Tariff after this item was inserted in the Tariff with effect from 1-3-1975." Pursuant to this order, the appellants claimed refund of the entire duty paid under Item No. 16B CET. THE Assistant Collector, while dealing with, the refund claim, deducted out of the refund due in terms of the revision-order, a sum representing the duty in terms of Item No. 68 CET. This again was challenged before the Appellate Collector who upheld the Assistant Collector's order. Hence the present appeal.
(2.) When this appeal was taken up for hearing, Shri V. Lakshmikumaran, Counsel for the appellants submitted that the arguments in the present matter would be the same as those which had been advanced earlier during the hearing in Appeal No. ED(SB)369/82-D, which was filed by the same appellant involving a similar issue. Shri Vineet Kumar, Sr. Departmental Rep. also made a submission to the same effect. Excise Appeal No. 369/82-D has since been disposed of by this Tribunal vide Order No. 538/87-D dated 10-7-1987. The decision rendered therein was based inter alia on the judgment of the Delhi High Court in Bharat Commerce and Industries Ltd. v. Union of India and Ors. 1979 ELT (J 527). In para 13 of the judgment the Court observed as follows :- "It is admitted that no such demand can be raised in this case because the period mentioned in the rule has run out. While it may be legitimate for the respondent to adjust a refund payable to an assessee against other amount of duty payable by him in accordance with law. It is certainly not open to them to make such an adjustment against a demand which has not been and which cannot be made. The orders of the Appellate Collector and the revision order directing such appropriation by way of adjustment are wholly illegal and without justification." It was held by the Tribunal that in the absence of a proper notice and consequent re-assessment following adjudication proceedings, the Revenue was not entitled to adjust the duty on flush doors under Item No. 68 CET against the refund of duty collected under Item No. 16B CET, which was payable to the appellants in consequence of the Central Government's order in revision. Following the said decision, we set aside the impugned order in the present case and allow the appeal. ;