2015 (1) TMI 936 - AT - Central Excise

Denial of refund claim - Deposit made in exchequers accounts through making debit in PLA account - deposit were made under protest and letter dated 31-3-1992 was also written by the appellant to the Assistant Collector of Central Excise, Gurgaon detailing about the dispute going on between the Revenue and the assessee as regards the vehicles, which were exported earlier and returned back as damaged vehicles and received by the assessee in their factory - Held that - Assistant Commissioner sanctioned the refund of ₹ 4.06 crores approximately in his file only on 4-5-1995, by making endorsement on the copy of PLA extract and the relevant TR-6 challan. There was admittedly no order of the Assistant Commissioner in an appealable form, issued after observing the principals of natural justice. It was only a file noting. In fact, it seems that the said sanctioning of refund claim on the file itself was not considered an order, even by the Revenue itself, inasmuch as the Assistant Commissioner subsequently passed a proper order-in-original on 23-1-1996. As such, we fully agree with the assessee that the action on the part of the Commissioner (Appeals) to restrict the refund to an amount of ₹ 4.06 crores is not proper and the assessee would be entitled to the entire refund claim of ₹ 4.50 crores. As regards the Revenue s appeal, the prayer is to restrict the refund claim to ₹ 2.71 crores, as done by the Assistant Commissioner in his order-in-original impugned before Commissioner (Appeals). However, we find that the said order was passed by the Assistant Commissioner on 23-1-1996 and a part of the refund claim stand rejected on the ground that the requisite original document relatable to export of the vehicles are not available. However, subsequent to the passing of the said order of the Assistant Commissioner, the Commissioner of Central Excise, in a separate proceedings relating to the demand of duties in respect of the export vehicles, dropped the proceedings vide his order dated 9-11-1998. Once the demand in respect of export vehicles stands dropped by the Commissioner vide his order dated 9-11-1998, the reasoning of non-availability of original documents by the Assistant Commissioner adopted in his order dated 23-1-1996 is no longer available to the Revenue for denial of a part of the amount deposit so made by the assessee. As such, we find no merits in the Revenue s prayer. - Decided against Revenue.

Summary

Issues:
1. Refund of ad hoc deposit made by the assessee under protest.
2. Validity of the Assistant Commissioner's order sanctioning refund.
3. Commissioner (Appeals) decision on the refund claim.
4. Challenge by Revenue to restrict the refund claim.
5. Final decision on the refund claim by the Tribunal.

Issue 1: Refund of ad hoc deposit made by the assessee under protest

The case involved M/s. Maruti Udyog, a manufacturer of motor vehicles, who made an ad hoc deposit of &8377; 4.5 crores on 31-3-1992 following an oral request from the Assistant Commissioner of Central Excise. The deposit was made under protest, as detailed in a letter to the Assistant Collector. The dispute arose regarding the duty liability on vehicles exported, damaged, and returned to the factory. The Commissioner later dropped the duty liability demand, which was not challenged by the Revenue, establishing no outstanding demand against the assessee.

Issue 2: Validity of the Assistant Commissioner's order sanctioning refund

The Assistant Commissioner sanctioned a refund of &8377; 4,06,55,187/- on 2-5-1995, but no formal order was passed. The assessee subsequently claimed the refund, leading to the Assistant Commissioner's order-in-original dated 23-1-1996, allowing a partial refund and rejecting the balance due to missing export documents. However, the Commissioner (Appeals) remanded the matter for re-examination, leading to a series of appeals and orders.

Issue 3: Commissioner (Appeals) decision on the refund claim

The Commissioner (Appeals) in the present impugned order-in-appeal dated 30-3-2005 allowed a refund of &8377; 4,06,55,183/- but rejected a balance claim of &8377; 43,44,813/-, citing the Assistant Commissioner's previous sanction and the lack of appeal by the assessee against it. The decision was based on the premise that the refund was to be restricted to the amount sanctioned by the Assistant Commissioner.

Issue 4: Challenge by Revenue to restrict the refund claim

The Revenue challenged the Commissioner (Appeals) decision, seeking to restore the Assistant Commissioner's order dated 23-1-1996, which granted a partial refund. However, the Tribunal found that subsequent events, including the dropping of duty liability demands, rendered the reasoning for denying part of the refund invalid, leading to a rejection of the Revenue's appeal.

Issue 5: Final decision on the refund claim by the Tribunal

The Tribunal, after considering the entire sequence of events, concluded that the assessee's appeal should be allowed, resulting in the full refund claim of the deposits. Simultaneously, the Revenue's appeal was rejected, affirming that no duty demand was outstanding against the assessee, and the full refund claim was warranted based on the circumstances presented.

This detailed analysis of the judgment highlights the key issues, decisions made at various stages, and the final outcome determined by the Tribunal regarding the refund claim in the case.