2006 (7) TMI 100 - HC - Central Excise

Refund Mr. Rajiv authorized signatory of Respondent Co. While he was under detention he was required to pay Rs. 27 lakh towards excise duty and the same was paid on his behalf by respondent Amount deposited pursuant to bail order is refundable to respondent with interest @ 9%

Summary

Issues:
1. Dispute over excise duty between Respondent and Appellant.
2. Arrest of authorized signatory for evading excise duty.
3. Refund of amount deposited towards excise duty.
4. Dispute regarding refund recipient.
5. Challenge to Customs, Excise, and Service Tax Appellate Tribunal order.
6. Entitlement of Respondent for refund.
7. Claim over refunded amount by individuals/entities.
8. Interest payment in case of delayed refund.

Analysis:
1. A dispute arose between the Respondent and the Appellant regarding excise duty. The authorized signatory of the Respondent, who was also a Director of another company, was arrested for evading excise duty and was granted bail upon depositing a specific amount towards excise duty.

2. The Respondent, through its authorized signatory, applied for a refund of the amount deposited towards excise duty after it was determined that no excise duty was payable. The Appellant insisted on refunding the amount only to the authorized signatory, leading to a disagreement.

3. The matter was taken to the Customs, Excise, and Service Tax Appellate Tribunal, which ruled in favor of the Respondent, ordering the refund of the deposited amount. The Appellant challenged this decision, arguing that the refund should be made to the authorized signatory and not the Respondent.

4. The High Court found that the Respondent was entitled to the refund since the excise duty was not payable by either the Respondent or the other company. The Court clarified that it did not matter whether the refund was made to the Respondent or the authorized signatory.

5. The High Court dismissed the appeal, stating that the Tribunal's order did not raise any substantial legal questions for consideration. It directed the Appellant to refund the amount to the Respondent by a specified date, warning of interest payment at 9% per annum for delays.

6. The Court explicitly stated that neither the authorized signatory nor the other company would have any special claim over the refunded amount against the Appellant. This decision aimed to resolve any potential future disputes over the refund recipient and ensure clarity regarding the entitlement to the refunded sum.