2007 (10) TMI 519 - AT - Central Excise

Summary

Issues:
Refund of pre-deposited amount disallowed by Commissioner Appeals.

Analysis:
The appeal was filed against Order-in-Appeal No. 66/2006 passed by the Commissioner of Central Excise and Customs Appeals Visakhapatnam. The appellants, manufacturers of excisable goods, had pre-deposited amounts based on the Commissioner's orders for various appeals. The Commissioner Appeals disallowed Modvat credit amounting to Rs. 1,38,372, while the appellants had pre-deposited a total of Rs. 4,13,356. The appellants informed the department of their intention to take credit for the excess amount and requested a refund. However, the original authority only refunded Rs. 1,11,870, denying Rs. 26,502. The Commissioner Appeals upheld this decision, leading the appellants to approach the Tribunal.

During the hearing, it was found that the total pre-deposited amount was Rs. 4,13,356, and the disallowed credit was Rs. 1,38,372. The appellants had taken suo motu credit of the balance amount of Rs. 2,74,984 and informed the department accordingly. The Tribunal set aside the Commissioner Appeals' orders and allowed the appeal, entitling the appellants to the entire disallowed amount of Rs. 1,38,372. However, the original authority only refunded a portion, rejecting Rs. 26,502, claiming it was time-barred. The Tribunal disagreed, stating that once relief is granted, the entire disallowed amount must be refunded. Since the appellants had taken credit of only Rs. 2,74,984, they were entitled to the full disallowed amount. The rejection of Rs. 26,502 was deemed incorrect, and the appeal was allowed with consequential relief.