2005 (10) TMI 295 - AT - Central Excise

Summary

Issues:
1. Duty demand confirmation and penalty imposition by the Commissioner of Central Excise.
2. Appeal filed before the Tribunal with a request for waiver of pre-deposit.
3. Tribunal's directions for bank guarantee and cash deposit.
4. Tribunal's final order upholding penalty but ordering re-quantification of duty amount.
5. Appeal filed before the Supreme Court against Tribunal's order.
6. Supreme Court's decision setting aside duty demand and penalty.
7. Claim for refund of the deposited amount.
8. Rejection of the refund claim by the Deputy Commissioner citing Sections 131 and 132 of the Finance Act, 2001.
9. Upholding of the rejection by the Commissioner (Appeals).

Analysis:
The case involved a series of legal proceedings starting with the confirmation of duty demand and penalty imposition by the Commissioner of Central Excise, which led to an appeal before the Tribunal by the appellants along with a request for waiver of pre-deposit. The Tribunal, through its stay order, directed the appellants to provide a bank guarantee and cash deposit. Subsequently, the Tribunal's final order upheld the penalty but ordered re-quantification of the duty amount. The appellants then appealed to the Supreme Court, which ultimately set aside the duty demand and penalty in their favor.

Following the Supreme Court's decision, the appellants filed a claim for a refund of the deposited amount. However, the Deputy Commissioner rejected the refund claim, citing Sections 131 and 132 of the Finance Act, 2001. The Deputy Commissioner argued that the demand raised under Rule 10(1), which was deleted without a saving clause, was protected/revived by Section 38A of the Central Excise Act read with the Finance Act provisions. The Commissioner (Appeals) upheld this rejection.

Upon hearing both sides and examining the records, it was noted that the duty demand against the appellants was struck down by the Supreme Court due to the absence of a saving clause when Rule 10 of the Central Excise Rules was deleted. The adjudicating authority rejected the contention that proceedings could be revived under Section 38A, as the show cause notice proposing the rejection of the refund claim was issued after the introduction of the relevant Finance Act provisions. Consequently, the appellate authority set aside the impugned order and allowed the appeal, ruling in favor of the appellants.