2003 (9) TMI 421 - AT - Central Excise

Summary

Issues:
1. Refund bifurcation between CENVAT credit and cash payment.
2. Legality of the order passed by the Dy. Commissioner.
3. Appellants' right to appeal against the original order.
4. Interpretation of Board's circular regarding duty payment.

Issue 1: Refund bifurcation between CENVAT credit and cash payment

The appeal concerned the refund of Rs. 10,84,461/-, with a dispute arising over the mode of payment. The Assistant Commissioner had allowed the full refund to be paid in cash without specifying any amount to be adjusted in the CENVAT credit account. The appellant argued that if the Department wanted a bifurcation, they should have appealed the original order. The Tribunal agreed that the refund should have been bifurcated as per the Board's circular, and the Dy. Commissioner's subsequent order was deemed illegal as the matter had already been decided in favor of the assessee. The Tribunal directed the payment to be made in cash or by cheque/demand draft within three months, failing which interest would be payable.

Issue 2: Legality of the order passed by the Dy. Commissioner

The Tribunal found the Dy. Commissioner's order to be illegal as she had become Functus Officio after the matter had been decided by her predecessor in favor of the appellant. The order failed to address the bifurcation issue and incorrectly relied on the findings of the lower authorities. The Tribunal emphasized that the refund should have been bifurcated as per the Board's circular, and the Dy. Commissioner should have followed the original order instead of issuing a subsequent conflicting one.

Issue 3: Appellants' right to appeal against the original order

The appellant contested the assertion by the lower authorities that they should have appealed the original order if aggrieved. The Tribunal agreed with the appellant, stating that there was no cause for appeal as the Assistant Commissioner had sanctioned the refund to be paid in cash without specifying any adjustment in the CENVAT account. The Tribunal deemed the direction to appeal improper and illegal, emphasizing that the Assistant Commissioner should have addressed the bifurcation issue in the original order itself.

Issue 4: Interpretation of Board's circular regarding duty payment

The Revenue cited a Board circular stating that duty paid by debit in RG 23 should be credited back to the account rather than paid in cash. However, the Tribunal emphasized that in this case, the refund should have been bifurcated as per the circular, with the amount paid through CENVAT credit to be adjusted accordingly. The Tribunal found that the Assistant Commissioner's failure to specify the bifurcation in the original order led to the confusion and subsequent incorrect orders by the Dy. Commissioner.

In conclusion, the Tribunal allowed the appeal, directing the payment to be made in cash or by cheque/demand draft within three months. The Tribunal set aside the impugned order of the Commissioner (Appeals) and emphasized the importance of adhering to the Board's circular regarding refund bifurcation between CENVAT credit and cash payment.