2016 (9) TMI 1388 - AT - Central Excise

Refund claim - failure to produce documents relevant to evincing that credit had accumulated because output had been exported by M/s. Bombay Dyeing & Manufacturing Co. for whom appellants were producing made-up articles out of fabrics supplied by the principal - Held that - The order of the Tribunal is unequivocal and, by no stretch, can it be seen as a remand order. The original authority is merely expected to release the refund and not subject the appellant to the quasi-judicial process once again. The first appellate authority appears also to have raised fresh grounds for denying the refund in clear disregard of judicial discipline - Failure to sanction refund, whether out of obduracy or out of ignorance, does no credit to the officers concerned. In the normal course, imposing costs on the lower authorities would have been in order but the matter is not of the recent past. The present status of the officers concerned is not known and it is that, and that alone, which deters the imposition of costs. The competent authority is directed to implement the order of the Tribunal - impugned order set aside - appeal allowed.

Summary

Issues:
Refund claim rejection for failure to produce relevant documents proving export of goods.

Analysis:
The appeal was filed against the order-in-appeal rejecting the claim for refund of a specific amount. The Tribunal had previously upheld the appellant's claim for refund in a decision dated September 16, 2010, after it was initially rejected by the original authority and the first appellate authority. The Tribunal's order clearly acknowledged the eligibility for refund and granted consequential relief based on the evidence and circumstances presented. The lower authorities, however, misinterpreted the Tribunal's decision as a mere suggestion to reevaluate the claim, requiring the appellant to provide additional evidence to prove that the inputs were indeed used in goods exported. This misinterpretation led to the rejection of the refund application.

The Tribunal emphasized that its previous order was not a remand order but a directive to release the refund without subjecting the appellant to further quasi-judicial processes. The first appellate authority's introduction of new grounds to deny the refund was deemed a violation of judicial discipline, as once consequential relief is granted, lower authorities lose the power to reject it. Failure to grant the refund, whether intentional or due to oversight, was criticized, and the Tribunal suggested that costs should have been imposed on the lower authorities, but refrained from doing so due to the lack of current information about the officers involved.

Consequently, the competent authority was directed to implement the Tribunal's order, setting aside the impugned order, the original order, and the show cause notice. The judgment highlighted the importance of adherence to judicial decisions, the limitations on lower authorities once consequential relief is ordered, and the necessity for timely and accurate implementation of legal directives.