2008 (9) TMI 247 - AT - Central Excise

Refund claim of pre-deposit - even prior to the decision on the refund claim (order dated 28-6-2001), the issue on merits was decided against the assessee by the Deputy Commissioner s order dated 12-6-2001. Therefore, the Commissioner (Appeals) in impugned order has clearly erred in holding that if any dues were to be re-adjudged against the assessee at a later date, the recovery action could have been pursued in the manner prescribed under law. In other words, however, the dues were already re-adjudged by the Deputy Commissioner s order dated 12-6-2001 and, therefore, the adjudicating authority had rightly rejected the refund claim by his order dated 28-6-2001 revenue appeal allowed

Summary

Issues:
Refund claim rejection based on re-adjudication of assessable value and penalty imposition.

Analysis:
The case involves respondents engaged in manufacturing motor vehicles and parts, facing an order-in-original for dues of Rs. 30,83,795, including duty and penalty. The Commissioner (Appeals) directed pre-deposit of the entire dues, which the assessees complied with. Subsequently, the appeal was decided, setting aside the original order and remanding the issue of valuation for a fresh decision. Despite this, the assessees filed a refund claim for the deposited amount, which was rejected by the Deputy Commissioner on the grounds that the issue of assessable value had been re-adjudicated against the assessees, confirming the duty and imposing a penalty. The Commissioner (Appeals) allowed the appeal, stating that the deposited amount should have been returned once the original order was set aside, and any re-adjudged dues could be pursued later as per the law. The Revenue appealed this decision.

Upon review, the Tribunal found that the issue on merits had already been decided against the assessees by the Deputy Commissioner before the refund claim rejection. Therefore, the Commissioner (Appeals) erred in suggesting that any re-adjudged dues could be pursued later, as they had already been re-adjudicated. Consequently, the Tribunal set aside the Commissioner's decision and allowed the Revenue's appeal. The cross-objections filed by the assessees were dismissed as they were comments on the department's appeal and deemed infructuous.