2004 (5) TMI 431 - AT - Central Excise

Refund - Bail security - Adjudication - Interim deposit - Settlement Commission - Deposit pending settlement

Summary

Issues:
1. Entitlement of the appellant for the refund of the amount in dispute.
2. Relief to be granted.

Analysis:
1. The appellant, a company, filed an appeal against an order related to the arrest of its director in connection with an offence under the Central Excise Act. The director deposited Rs. 50 lakhs as a security for bail, which was retained by the Settlement Commission. The appellant sought a refund of this amount, contending that it falls under 'pre-deposit' and should be refunded once proceedings are terminated. The appellant also relied on a Circular by the Central Board of Excise & Customs and a Bombay High Court decision. The department argued that the amount is not a pre-deposit and should be withheld to protect the interest of Revenue. The Settlement Commission retained the amount for protecting Revenue's interest without attaching it. The Commission did not make a final order regarding the amount, and as no proceedings were pending, the appellant was entitled to a refund with interest accrued.

2. The appellant had also deposited Rs. 4,46,284 towards admitted duty liability. The Tribunal held that this amount, whether deposited in compliance with the Settlement Commission's order or voluntarily, was towards duty payable and could not be refunded. Therefore, the Tribunal allowed the appeal partly, granting a refund of Rs. 50 lakhs with interest but denying the refund of Rs. 4,46,284 deposited towards duty liability. The orders of the adjudicating authority and Commissioner (Appeals) were set aside accordingly.