2015 (11) TMI 832 - AT - Central Excise

Denial of refund claim - SCN not issued - Held that - Since the deposit of ₹ 15 lakhs was proposed to be appropriated in the show cause notice dated 5/4/2006 issued by DGCEI to M/s. Quality Processors therefore unless until show cause notice is finally decided, refund claim is not mature. I also observe that appellant themselves have proposed for adjustment of this ₹ 15 lakhs against short payment of duty by M/s. Quality Processors. In such a situation, I agree with the lower authorities that the refund cannot be granted at this stage. Information regarding the status of the proceedings of show cause notice dated 5/4/2006 is not available on record before me. In view of the above position, I remand the matter to the original adjudicating authority with a direction that refund claim of ₹ 15 lakhs filed by the appellant should be processed in accordance with law after conclusion of proceedings covered under the show cause notice dated 5/4/2006. - Decided in favour of assessee.

Summary

Issues:
- Appeal against rejection of refund claim of Rs. 15 lakhs deposited during investigation.
- Appropriation of amount in show cause notice.
- Jurisdiction of adjudicating authority.
- Refund claim processing.

Analysis:
The appeal was filed against the rejection of a refund claim of Rs. 15 lakhs deposited by the appellant during an investigation. The show cause notice issued to another party, M/s. Quality Processors, included a proposal to appropriate the amount deposited by the appellant. The adjudicating authority rejected the refund claim, stating that until the show cause notice is decided, the refund cannot be sanctioned. The Commissioner(Appeals) upheld this decision, leading to the appellant's appeal to the tribunal.

During the tribunal hearing, no representation was made on behalf of the appellant, prompting the tribunal to proceed with the case based on merit. The Revenue, represented by the Ld. Asstt. Commissioner(A.R.), argued that since the amount was proposed to be appropriated in the show cause notice and the appellant had also indicated willingness to adjust the amount against the duty liability of M/s. Quality Processors, the refund claim could not be processed until the conclusion of the show cause notice proceedings.

The tribunal carefully considered the arguments presented and noted that the facts were not in dispute. As the amount was proposed for appropriation in the show cause notice, the tribunal agreed that the refund claim could not be granted at that stage. The tribunal observed that the appellant had themselves suggested adjusting the amount against the duty liability of M/s. Quality Processors. Consequently, the tribunal remanded the matter to the original adjudicating authority with directions to process the refund claim after the conclusion of the proceedings related to the show cause notice.

In conclusion, the tribunal remanded the case for further processing of the refund claim of Rs. 15 lakhs in accordance with the law after the completion of the proceedings linked to the show cause notice issued to M/s. Quality Processors.