2008 (5) TMI 221 - AT - Central Excise

Refund claim for the pre-deposit amount deposited in cash amount allowed to be credited to Cenvat account held that such amount should be refunded in cash if assessee file reliable intimation that appeal has been allowed in their favour - refund of the impugned amount was not governed by Section 11B refund should be entitled in cash

Summary

Issues:
1. Appeal filed beyond prescribed time for filing appeals.
2. Claim for cash refund rejected by Commissioner (A).
3. Eligibility for refund of pre-deposit under Section 35F of the Central Excise Act.
4. Refund in cash versus credit in cenvat account.
5. Appeal rejection by Commissioner (A) as barred by limitation.
6. Failure to challenge original authority's order in time.
7. Granting of refund in cash as per CBEC Circular.
8. Interpretation of CBEC Circulars binding on Revenue.
9. Legal position on orders contrary to CBEC Circulars.
10. Entitlement to refund in cash.

Analysis:

1. The appeal filed by the appellant was rejected by the Commissioner (A) as it was filed beyond the prescribed time for filing appeals. The order-in-appeal dated 20-6-2006 rejected the appeal as barred by limitation, which was found to be in accordance with the law.

2. The claim for cash refund of Rs. 2,62,709/- made by the appellant was initially rejected by the Commissioner (A) in the order-in-appeal No. 285/2005-C.E. dated 13-12-2005. The Commissioner (A) found that the appellants were eligible for the refund but could not grant the relief due to technical snags related to the failure to challenge the original authority's order in time.

3. The appellants sought refund of a pre-deposit amount under Section 35F of the Central Excise Act. The Dy. Commissioner initially sanctioned the refund to be credited in the RG 23 A account. However, the appellant requested the refund in cash, which was rejected by the Dy. Commissioner citing no provision for refund of an amount already credited in the cenvat account.

4. The Tribunal found that the appellant was entitled to the refund in cash as per CBEC Circular No. 275/37/2K-CX.8A, which stated that refunds of pre-deposits should be treated separately and not governed by Section 11B. The Commissioner (A) should have allowed the appeal and granted the refund in cash, considering the binding circular of CBEC.

5. The legal position, as per the Supreme Court judgments, emphasized the primacy of CBEC Circulars in interpreting the law. Orders contrary to CBEC Circulars were deemed invalid, and the appellant was entitled to the refund in cash. The order of the lower appellate authority denying the refund was vacated, and the appeal was allowed with consequential relief.

This detailed analysis of the judgment highlights the issues involved, the legal arguments presented by both parties, and the final decision based on the interpretation of relevant laws and CBEC Circulars.