2017 (3) TMI 1754 - HC - Customs

Grant of refund - refund allowed subject to the condition that the assessee furnished a bank guarantee for half of the amount - refund denied on the ground that the order of CESTAT could be implemented only on the same terms on which the Supreme Court passed the interim orders in the case arising out of the Gujarat High Court - HELD THAT - It is true that the order of CESTAT on the basis of which the petitioner became eligible for refund was passed on the strength of the decision of the Ahmedabad Bench of CESTAT. It is also true that the decision of the Ahmedabad Bench of CESTAT is the subject matter of a special leave petition pending before the Supreme Court. The department which chose to go into slumber from 30-12-2015 did not even wake up after the order dismissing the application for modifying the final order passed by the CESTAT on 20-10-2016. In other words the department has chosen to file an appeal if what is stated across the Bar is correct only after the order impugned in the present writ petition. Therefore the finality has attached to the order of the Tribunal in the case of the petitioner cannot be overcome by this post facto remedial measure. The respondents are directed to refund the amount within a period of 8 (eight) weeks from the date of receipt of a copy of this order - Petition allowed.

Summary

Issues:
Challenge to Order-in-Original refusing refund arising from CESTAT decision.

Analysis:
The petitioner challenged an Order-in-Original denying a refund following a CESTAT decision. Three statutory appeals by the petitioner were rejected by the Appellate Authority, but CESTAT allowed them based on a decision from Ahmedabad Bench, confirmed by Gujarat High Court. The Department informed CESTAT that the Supreme Court allowed the refund subject to a bank guarantee. The CESTAT's order of 30-12-2015, which allowed the appeals, has since become final as no further appeals have been filed by the petitioner.

The petitioner sought a refund based on the CESTAT decision, but the Adjudicating Authority refused, stating it could only be implemented under the terms set by the Supreme Court in a related case. However, the court noted that the dispute between the petitioner and the Department had concluded with the CESTAT's decision.

The Department filed for a review, which was dismissed in 2016, leading them to file an appeal within the limitation period. The court clarified that the cause of action for the appeal arose from the CESTAT's 2015 order, and a later dismissed modification application did not extend the limitation period for the appeal.

Despite the Department's intention to file an appeal, they did not do so promptly, waiting until after the current writ petition was filed. The court emphasized that the finality of the CESTAT's order could not be undermined by a delayed appeal. Consequently, the writ petition was allowed, directing the respondents to refund the amount within eight weeks from the order date, with pending petitions in the case to be closed without costs.