2017 (5) TMI 504 - AT - Central Excise

Refund claim - amount deposited as pre-deposit in excess of what was required to be submitted - refund denied on the ground that the same has not been appropriated at the time of adjudication - Held that - the appellant has paid a sum of Rs. 4 crore through TR-6 challans which were placed on record and the same has been recorded in the SCN itself. In that circumstance case the appellant was entitled for the refund claim of Rs. 4, 66, 35, 243/- but the authorities below has sanctioned a claim of Rs. 3, 66, 35, 243/- which is incorrect. In fact the appellant is still entitled for refund of Rs. 1 crore which was required to be refunded in pursuance of the order of this Tribunal dated 15.5.2006 - refund allowed - decided in favor of appellant.

Summary

Issues:
Claim of refund rejection of Rs. 1 crore.

Analysis:
The case involves an appeal against the rejection of a refund claim of Rs. 1 crore by the appellant. The appellant, engaged in manufacturing motor vehicles, faced denial of cenvat credit due to shortages in input stock. Despite paying Rs. 4 crores through TR-6 challans, the demand of duty was confirmed. The matter reached the Tribunal, which set aside the demand and allowed the appeal. Subsequently, the appellant filed a refund claim of Rs. 4,66,35,243, but only Rs. 3,66,35,243 was granted, with Rs. 1 crore being withheld as it was not appropriated during adjudication. The appellant contended that the amount was withheld arbitrarily, and they were entitled to interest on the refund claim.

The appellant argued that the refund claim was filed following the Tribunal's order, and the Rs. 1 crore was unjustly retained by the Revenue. They claimed to have rectified the mistake in the Final Order, but it was not acknowledged, indicating arbitrariness in withholding the refund. The appellant sought interest for the period until realization of the refund amount. On the contrary, the Revenue stated that Rs. 3,66,35,243 was appropriated during adjudication and refunded to the appellant.

After hearing both sides, the Tribunal observed discrepancies in the appropriation of funds. While Rs. 3,66,35,243 was appropriated initially, the appellant had actually paid Rs. 4 crores, with the excess amount carried forward. The appellant's request for rectification was disregarded by the authorities, leading to an incorrect refund grant of Rs. 3,66,35,243. The Tribunal ruled in favor of the appellant, directing the adjudicating authority to refund the remaining Rs. 1 crore as per the Tribunal's order and pay interest for the intervening period until the realization of the refund claim amount.

Therefore, the appeal was disposed of with the direction to refund the outstanding amount and pay interest as per the Tribunal's order.