2017 (2) TMI 971 - AT - Central Excise

Refund - revenue filed an appeal against the order sanctioning refund order - denial on the ground that the refund claim did not satisfy the conditions of Section 11B ibid - Held that - there was no stay against the implementation of the order of the CESTAT. There are numerous judicial pronouncements reiterating that mere filing of appeal and stay petition does not entitle the department to refuse refund - reliance was placed in the case of Dhampur Sugar Mills Ltd. Vs. C.C.E., Moradabad 1985 (9) TMI 94 - HIGH COURT OF ALLAHABAD where it was held that mere filing of the appeal before the Tribunal did not result in granting an automatic stay order in favor of the respondents - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against Order-in-Appeal No. 99/SVS/GGN/2014 dated 28.02.2014.
2. Refund claim filed by respondent under Section 11B of the Central Excise Act, 1944.
3. Appeal by department against refund claim.
4. Compliance of orders and judicial discipline in refund cases.

Analysis:
1. The appeal was filed by the Revenue against Order-in-Appeal No. 99/SVS/GGN/2014 dated 28.02.2014 passed by the Commissioner of Central Excise (Appeals), Delhi-III, Gurgaon. The respondent, a manufacturing company, had surrendered Central Excise Registration after the excise duty on their manufacturing activity was withdrawn. The refund claim was filed by the respondent following a previous order, which partially rejected their claim. The Commissioner (Appeals) allowed the refund claim under Section 11B of the Central Excise Act, 1944, leading to the current appeal by the department.

2. The respondent's refund claim of ?28,16,265/- was partially rejected by the Assistant Commissioner of Central Excise. The Commissioner (Appeals) later allowed the refund, prompting the department to file an appeal. The Assistant Commissioner sanctioned the refund claim as there was no stay order against the implementation of the order. The Commissioner (Appeals) rejected the department's appeal against the refund order.

3. The department's grounds for appeal included the contention that the Commissioner (Appeals) should have followed judicial discipline by complying with the higher authorities' orders. However, the Tribunal found that since there was no stay against the implementation of the order, the appeal filed by the Revenue was correctly rejected. Citing judicial precedents, the Tribunal emphasized that mere filing of an appeal does not automatically entitle the department to refuse a refund, unless a stay order is obtained.

4. The Tribunal dismissed the appeal by the Revenue, emphasizing the importance of obtaining a stay order before refusing a refund claim. The judgment highlighted the significance of complying with legal procedures and judicial discipline in matters of refunds and appeals, as demonstrated by previous legal decisions. The decision was pronounced in court on 05.12.2016.