2016 (2) TMI 762 - AT - Central Excise

Refund of amount made during the course of investigation, under protest - Commissioner (Appeals) held that the Original Authority should refund the amount to the appellant and the appropriation of the said amount against the dues of Shri V.K. Madan and others is not legally sustainable - Held that - The Adjudicating Authority has adjusted the refund claim of the Appellant in the absence of any of these evidences. But what is the evidence on record with the Adjudicating Authority for holding this view that the Company s accounts including that of Appellant are run by Shri V.K. Madan as his personal accounts? It is settled law that a finding of this nature should be always based on positive evidence to be gathered by department. The evidence is missing in this case. The adjudicating authority has also admitted before me that other than letter of Commissioner dated 17.07.09 and the letter dated 08.03.2010 of Assistant Commissioner (Prev.), no other evidence was made available to him. Thus in the absence of any legal, tangible unimpeachable evidences the impugned order is not sustainable and merits to be set aside - Decided against revenue

Summary

Issues:
1. Appropriation of refunded amount against dues of another individual.
2. Lack of evidence supporting appropriation decision.
3. Legality of the appropriation decision by the Original Authority.

Analysis:
1. The case involved the appeal by the Revenue against the Order of the Commissioner (Appeals)-II, Bhopal regarding the refund of an amount deposited by the respondent during an investigation for irregular availment of cenvat credit. The Hon'ble High Court ordered that the refund be decided by the Department after hearing the petitioner. The Commissioner (Appeals) held that the refund should be made to the appellant and the appropriation against the dues of another individual was not legally sustainable. The Revenue appealed against this decision.

2. The Revenue argued that the individual behind the irregularities had de-facto control over the respondent's unit. However, the Tribunal noted that there was a lack of evidence supporting the appropriation decision. The Commissioner (Appeals) found that there was no documentary evidence establishing the individual's control over the company's accounts, making the appropriation unjust. The Tribunal emphasized the need for positive evidence to support such findings, which was absent in this case.

3. The Tribunal examined the appeal records and the impugned order, finding that the grounds of appeal lacked any legal or factual basis supporting the appropriation decision. The Tribunal concluded that there was no merit in the appeal and upheld the findings of the impugned order, dismissing the Revenue's appeal. The decision highlighted the importance of legal and tangible evidence to support appropriation decisions and emphasized the need for a factual and legal basis for appeals to be considered.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the parties, and the Tribunal's reasoning in reaching its decision.