2006 (6) TMI 293 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty under the KVS Scheme; Refund claim rejection and appeal; Interpretation of Section 93 of the Finance Act regarding refund provisions.

In this case, the applicant filed an application seeking a waiver of pre-deposit of duty amounting to Rs. 10,94,130 under the KVS Scheme, which was initially rejected by the competent authority. Subsequently, the Commissioner of Central Excise directed the adjustment of this amount towards outstanding arrears of demand and penalty. The applicant then appealed to the Supreme Court, which ruled in their favor, stating that the appellant was not liable to pay excise duty on the goods in question. Following this judgment, the applicant sought a refund of the deposited amount under the KVS Scheme. The proper officer initially allowed the refund, but the Commissioner (Appeals) later held against the appellant, citing Section 93 of the Finance Act, which prohibits the refund of amounts paid under the KVS Scheme. The applicant argued that since the demand had been set aside after adjustment by the Commissioner of Central Excise, they were entitled to a refund. The Revenue, however, relied on Section 93 of the Finance Act, which states that amounts paid under the declaration shall not be refunded under any circumstances.

The Tribunal analyzed the situation and noted that since the amount had been adjusted against the demand and the appellant had a strong case, they directed the waiver of the entire pre-deposit amount for hearing the appeal. The stay application was allowed, and the appeal was scheduled for a hearing in due course. The order was dictated and pronounced in open court on 30-6-2006.