2004 (7) TMI 659 - AT - Central Excise

Summary

Issues:
1. Refund claim by the assessee rejected by the Revenue.
2. Commissioner (Appeals) directing a refund to the assessee.
3. Grounds for appeal by the Revenue against the Commissioner's decision.

Analysis:
1. The Revenue rejected the assessee's refund claim amounting to Rs. 1,31,29,199/- on the grounds that the claim was premature due to an ongoing investigation and an offence case against the assessee, and that refund of credit was not covered under Section 11B of the Act. The Revenue also argued that Section 11A and Section 11B cannot be applied together. However, no Show Cause Notice was issued before the assessee reversed the credits. The Tribunal cited a previous decision where it was held that the Revenue is not entitled to retain the amount deposited by the assessee during investigation if no duty liability is determined, and refunds have already been sanctioned and paid. Therefore, the Tribunal found no grounds in the Revenue's appeal and dismissed it.

2. The Commissioner (Appeals) set aside the lower authority's order and directed a refund of Rs. 97,59,872/- and Rs. 3,36,932/- totaling to Rs. 13,122,9193/- to the assessee. The Revenue appealed this decision on the grounds that a Show Cause Notice for the offence case had been issued and that the case law relied upon by the Commissioner (Appeals) was not relevant to the present case. However, the Tribunal, following a previous decision, found that since refunds had already been paid and no duty liability was determined even after a significant period, the Revenue was not entitled to retain the amount deposited by the assessee. The Tribunal upheld the Commissioner's decision and dismissed the Revenue's appeal.

3. The Tribunal's decision was based on the principle established in a previous case where it was held that the Revenue cannot retain amounts deposited by the assessee during investigation if no duty liability is determined. The Tribunal emphasized that once refunds have been sanctioned and paid, the Revenue has no grounds to appeal. The Tribunal dismissed the Revenue's appeal, aligning with the decision in the case of Florida Electrical Industries Ltd. vs. CCE, Delhi, and upheld the Commissioner (Appeals)'s order directing the refund to the assessee.