2016 (6) TMI 671 - AT - Central Excise

Allowance of abatement - not supported by proper evidence, in as much as, the letters of intimation of closures and commencement of production had not been duly acknowledged by the Department - Held that - No merit in the said ground after going through the copies of such letters which were produced before the Ld. Commissioner (Appeals) and also produced before this forum. Therefore, there cannot be any doubt that the Respondent is otherwise eligible to the abatement. On the second issue, find that the Respondent has produced relevant TR-6 Challan before the Ld. Commissioner(Appeals) in support of the payment of ₹ 3,52,500.00 against the liability of ₹ 3,31,928.00, leaving excess payment of ₹ 20,572.00, which is refundable to them. However, also find that the Ld. Commissioner (Appeals) in the Order has observed that the Respondents are required to pay interest of ₹ 20,752.00 against the delayed payment of duty of ₹ 2,00,000.00 during the said period, but erroneously directed refund ₹ 20,572.00. The Ld. Advocate for the respondent has fairly accepted that he has no evidence to establish that the interest liability of ₹ 20,572.00 was also paid by them during the course of proceedings before the authorities. In these circumstances, the Order directing refund of ₹ 20,572.00 is thus becomes erroneous and liable to be set aside. - Decided partly in favour of revenue

Summary

Issues:
1. Abatement allowed without proper evidence.
2. Refund directed without establishing interest liability payment.

Analysis:

Issue 1: Abatement allowed without proper evidence
The case involves an Appeal filed by the Revenue against an Order-in-Appeal alleging short payment of duty by the Respondent, who was engaged in the production of Iron and Steel Ingots. The Respondent had been discharging duty under the Compounded levy scheme, and a Demand Notice was issued for alleged short payment of duty. The Adjudicating Authority confirmed the demand and imposed a penalty, which was later appealed by the Respondent. The Ld. Commissioner (Appeals) allowed the Appeal and directed a refund to the Appellant. The Revenue contended that the abatement was erroneously extended without proper verification of relevant records of closure and recommencement of production during the period in question. However, the Tribunal found merit in the Respondent's submission, as verified letters of cessation and commencement of production were duly acknowledged by the Department, supporting the eligibility of the Respondent for abatement. Therefore, the Appeal on this ground was dismissed.

Issue 2: Refund directed without establishing interest liability payment
The second issue revolved around the direction for a refund of a specific amount without establishing the payment of interest liability. The Respondent had paid an excess amount against their duty liability, leading to a refundable amount. However, the Ld. Commissioner (Appeals) observed that the Respondents were required to pay interest against delayed payment of duty, but erroneously directed a refund without proper evidence of interest payment. The Tribunal noted that the Respondent failed to establish the payment of interest liability during the proceedings. Consequently, the Order directing the refund was deemed erroneous and set aside. The Revenue's Appeal was partly allowed on this ground, modifying the impugned order accordingly.

In conclusion, the Tribunal partially allowed the Revenue's Appeal, setting aside the direction for refund due to the lack of evidence regarding the payment of interest liability. The case highlights the importance of providing substantiated evidence to support claims during legal proceedings to ensure accurate judgments.