2007 (5) TMI 239 - AT - Service Tax

Order passed by Commissioner rejecting the refund claim overlooking this Tribunal s order is not legal - said Tribunal s order is still unmodified by any higher authorities and which remains the law of the land - by rejecting the refund already sanctioned, the Commissioner has not followed the judicial discipline- inadequacy of provisions for safeguarding the revenue by the revenue authorities cannot be a reason to place taxpayers at a disadvantageous position impugned order is set aside

Summary

Issues:
Appeal challenging rejection of refund claim by Commissioner of Central Excise, Jaipur.

Analysis:
The appeal challenged the rejection of a refund claim of Rs. 2,79,675 by the Commissioner of Central Excise, Jaipur, which was initially sanctioned to the appellant by lower authorities. The rejection was based on the grounds that the refund claim was sanctioned based on a Tribunal order still under judicial review and had not attained finality. Additionally, the Commissioner cited the limitation under section 84 of the Finance Act, 1994, stating that the case could not be kept pending indefinitely. The appellant argued that the Commissioner exceeded his jurisdiction by rejecting the refund claim and failing to honor the Tribunal's order. The appellant emphasized the principle of judicial discipline, citing a Supreme Court order that higher appellate authorities' orders should be followed unreservedly by subordinate authorities unless suspended by a competent court. The Departmental Representative argued that the Assistant Commissioner had complied with the Tribunal's order and that the revenue would not be disadvantaged as the money was still with the appellant pending a final order from the High Court. After examining the case, the Technical Member found the Commissioner's order to be illegal and improper, setting it aside and allowing the appeal.

In conclusion, the Tribunal held that the Commissioner's rejection of the refund claim was not legally justified, emphasizing the importance of following judicial discipline and protecting taxpayers from being disadvantaged due to inadequacies in revenue safeguarding provisions. The Tribunal overturned the Commissioner's order and allowed the appeal, directing that the refund claim be honored.