2019 (1) TMI 1746 - AT - Central Excise

Refund claim - area based exemption - N/N. 33/99-CE dated 08.07.1999 - only ground cited by the Revenue is that the Assistant Commissioner sanctioned the refunds, which were not proper in view of the subsequent investigation and the show-cause notice issued by DGCEI - HELD THAT - The refund claims were sanctioned after due scrutiny of the supporting documents by the jurisdictional Assistant Commissioner. Revenue has not highlighted any irregularities or mistakes in such documentary evidences on the basis of the refund claims have been sanctioned. It is also seen from the record that the show-cause notice issued by DGCEI was on a date subsequent to the date of sanction of the refund claim. Hence, since the jurisdictional Assistant Commissioner did not have any occasion to consider the fact of issue of such show-cause notice. The issue of show-cause notice on a later date cannot be a valid ground for recalling of refund claims already paid - Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Challenge to Orders-in-Appeal regarding refunds under Area Based Exemption Notification.
2. Validity of refund claims sanctioned by the jurisdictional Assistant Commissioner.
3. Grounds for challenging orders passed by the Commissioner (Appeals).

Detailed Analysis:
1. The appeals were filed by the Revenue challenging Orders-in-Appeal related to refunds under Notification No.33/99-CE. The respondents had manufacturing units in Arunachal Pradesh availing the exemption. The dispute arose regarding refunds sanctioned by the Assistant Commissioner based on the notification's provisions.

2. The jurisdictional Commissioner issued an Order-in-Review directing the Assistant Commissioner to appeal against the refunds. The Commissioner (Appeals) dismissed these appeals, leading the Revenue to file the present appeals. The Revenue contended that refunds should not have been sanctioned due to allegations of wrong cenvat credit availment by the respondents.

3. The Revenue argued that the Assistant Commissioner should not have granted refunds considering investigations by DGCEI. However, the respondents defended the refund claims, stating they were scrutinized properly, and no show-cause notice was issued before the refunds were sanctioned. The Tribunal found that the refunds were granted after due scrutiny, and the show-cause notice was issued after the refunds were paid, making it an invalid ground for challenging the refunds.

In conclusion, the Tribunal rejected the Revenue's appeals, emphasizing that the refunds were sanctioned appropriately, and the subsequent show-cause notice did not warrant a recall of the payments. The decision was based on the proper scrutiny of documents by the Assistant Commissioner and the timing of the show-cause notice issued by DGCEI.