2008 (2) TMI 760 - AT - Central Excise

Refund - Time Limitation - Provisional deposit of duty - Held that - the deposits made during the investigations are in the nature of provisional deposits and if the said deposit is not appropriated towards any final demand of duty or penalty, the same cannot be called to be deposit of duty, in which case the limitation provisions will not come into action - appeal dismissed - decided against Revenue.

Summary

Issues:
Refund of provisional deposit - Time bar for refund

Analysis:
The case involved the issue of refunding a provisional deposit made by the appellant during an investigation. The central excise officers visited the factory of the respondents and a case was made against them. The appellant deposited Rs. 50,000 towards potential dues during the investigation. Subsequently, after finalization of adjudication proceedings, duty was confirmed against them, and a penalty was imposed. The appellant had already paid the entire duty amount and 25% of the penalty within the specified time frame. The remaining Rs. 50,000 deposit was sought to be refunded by the appellant.

The Adjudicating Authority rejected the refund application citing time-bar constraints. However, the Commissioner (Appeals) opined that until the deposit is formally confirmed towards duty or penalty, it retains its provisional nature. Since there was no formal order confirming the deposit towards any specific liability, the Commissioner allowed the appellant's appeal for refund. The Tribunal was approached to challenge this decision.

Upon hearing both parties, the Tribunal concurred with the Commissioner (Appeals) that deposits made during investigations are provisional and do not fall under the category of duty until appropriated towards a final demand. Therefore, the limitation provisions for refund did not apply in this scenario. The Tribunal dismissed the Revenue's appeal, emphasizing that the deposit in question was not classified as duty, and hence, the limitation provisions were not applicable. Citing precedents, the Tribunal clarified that the statutory authorities are bound by the limitation only in cases concerning duty refunds, which was not the situation here.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) and rejected the Revenue's appeal. The stay petition filed by the Revenue was also disposed of in light of the judgment.