2016 (11) TMI 1328 - AT - Central Excise

Benefit of Notification No.56/02-CE dated 14.11.2002 - rejection of refund claims - as per Notification No. 19/08-CE dated 27.3.2008, the refund claim is restricted to the value addition by the assessee - Held that - The appellant is located in the State of Jammu and Kashmir and availing the benefit of Notification No.56 /02-CE dated 14.11.2002. The appellant is claiming the refund under the Notification No.56/02-CE dated 14.11.2002 i.e. whatever duty has been paid though PLA is entitled to self refund. The sole reason to deny the credit is that they have not challenged the validity of the Notification No.19/08-CE dated 27.3.2008. Therefore, the refund is not admissible to the appellants. The appellant has produced the order of the Hon ble Jammu & Kashmir High Court dated 14.11.2013 in OWP No. 1732/2012 wherein the operation of the Notification No.19/08-CE dated 27.3.2008 has been modified vide order dated 21.5.2013 and it is directed the appellants would release to the respondent-entrepreneur 50% of the amount due to them in terms of the judgement of the learned Single Judge, subject to furnishing solvent surety to the satisfaction of the jurisdictional Commissioner within a period of four weeks of their furnishing the said surety. In view of above order of the Hon ble High Court, the appellant is entitled for refund as per the order of the Hon ble High Court dated 21.5.2013 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection under Notification No. 19/08-CE dated 27.3.2008 in Jammu and Kashmir.

Analysis:
The appellants filed appeals against the rejection of their refund claim under Notification No. 19/08-CE dated 27.3.2008 by the adjudicating authority. The appellant, based in Jammu and Kashmir, was availing benefits under Notification No.56/02-CE dated 14.11.2002, allowing self-refund of duty paid through PLA. The Commissioner contended that since the appellants did not challenge the validity of Notification No. 19/08-CE dated 27.3.2008 before the Jammu & Kashmir High Court, the refund claim was not admissible. The appellant argued that they had indeed challenged the said notification before the High Court and obtained a stay order against its operation. The facts were undisputed, with the High Court's order dated 21.5.2013 modifying the operation of Notification No. 19/08-CE in favor of the appellant.

The Tribunal noted that the appellant's entitlement to refund was established by the High Court's order, which directed compliance with the interim direction issued by the Supreme Court. Consequently, the appellant was deemed entitled to the refund as per the High Court's order dated 21.5.2013. The appeals were disposed of in favor of the appellant based on the High Court's ruling, setting aside the impugned order rejecting the refund claim. The judgment highlighted the importance of challenging the validity of relevant notifications and obtaining appropriate legal remedies to establish entitlement to refunds under the applicable laws.