2018 (11) TMI 1698 - AT - Central Excise

Maintainability of appeal - Recovery of refund sanctioned fraudulently - HELD THAT - Considering the fact that the Ld. Commissioner has not quantified the amount to be recovered from the appellant, in that circumstances, the appellant is not required to make any pre deposit amount for entertaining the appeal. Therefore, the appeal can be entertained by this Tribunal. Considering the fact that at the time of entertaining the refund claim filed by the appellant before the adjudicating authority, their claim for fixation of special rate was pending before the Ld. Commissioner, in that circumstances, the impugned orders deserve no merits. Accordingly, the same are set-aside and the matters are remanded back to the adjudicating authority to decide the issue after special rate decided by the Ld. Commissioner. Appeal allowed by way of remand.

Summary

Issues:
- Appeal against impugned orders regarding refund claim rejection and penalty imposition
- Requirement of pre-deposit amount for entertaining the appeal
- Jurisdictional overreach by Ld. Commissioner (Appeals)
- Remand of the matters back to the adjudicating authority for decision after special rate determination

Analysis:
1. The appellant filed appeals against orders rejecting refund claims and imposing penalties. The Ld. Commissioner (Appeals) set aside the impugned orders, stating the refund claimed fraudulently was recoverable with interest under Section 11A/11AA of the Act. Additionally, a penalty equal to the refund amount was imposed under Section 11AC of the Act. The Ld. AR for the revenue insisted on a pre-deposit of 10% as confirmed by the impugned order.

2. The Tribunal, led by Mr. Ashok Jindal, considered the objection raised by the Ld. AR for the Revenue regarding the pre-deposit requirement. Since the Ld. Commissioner had not quantified the amount to be recovered from the appellant, the Tribunal ruled that no pre-deposit was necessary for entertaining the appeal, thereby allowing the appeal to proceed.

3. The case involved the appellant's initial refund claim, followed by an application for special rates on manufactured items. The refund claim was partially sanctioned by the adjudicating authority but exceeded the value addition based on the special rates. The Ld. Commissioner (Appeals) rejected the refund claim, prompting the appellant to challenge the decision due to the pending application for special rates. The Ld. Commissioner's order was deemed an overreach of jurisdiction, leading to the appeal.

4. After hearing both parties, the Tribunal found merit in the appellant's argument that the refund claim was filed while the special rate application was pending. Consequently, the impugned orders were set aside, and the matters were remanded back to the adjudicating authority. The Tribunal directed the authority to decide on the refund claim after the Ld. Commissioner determined the special rates as requested by the appellant.

5. In conclusion, the appeals were disposed of by way of remand, allowing the adjudicating authority to reconsider the refund claim in light of the special rates determined by the Ld. Commissioner. The Tribunal's decision aimed to address the procedural discrepancies and ensure a fair assessment of the refund claim based on the finalized special rates.