2018 (7) TMI 997 - AT - Central Excise

Transitional Credit - MODVAT scheme - Cash Refund - The ld. counsel submitted that the issue with regard to demand of ₹ 54,06,249/- has attained finality wherein the issue was held in favor of the appellant vide Order-in-Appeal No.47/2010 dated 4.8.2010 and therefore the question of adjustment of ₹ 8,13,816/- does not arise - Held that - It is very much clear that the adjudicating authority as well as the Commissioner (Appeals) have floated the order passed by the Tribunal by rejecting the refund claim of the appellant - the partial rejection of refund is against the order passed by Tribunal and therefore cannot sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility for transitional credit refund of ?8,13,816.
2. Eligibility for cash refund of ?11,03,303.
3. Compliance with Tribunal's final order by adjudicating authority.

Issue 1: Eligibility for transitional credit refund of ?8,13,816
The appellant sought transitional credit refund of ?8,13,816, which was initially allowed but later disallowed by the adjudicating authority. The appellant argued that the issue had been settled in their favor previously and the department had not appealed against it. The Tribunal noted that the credit was not contested by the department in earlier proceedings, and the appellant had already been granted credit of ?2,89,487 out of the total disputed amount of ?56,68,245. The remaining balance was ordered to be recovered, and the credit of ?8,13,816 was to be adjusted against it. However, the appellant contended that the issue of the demand had been decided in their favor in a subsequent order, making the adjustment unnecessary. The Tribunal held that the adjudicating authority and the Commissioner (Appeals) had erred in rejecting the refund claim, as it went against the Tribunal's previous order. The Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

Issue 2: Eligibility for cash refund of ?11,03,303
The Tribunal had previously ruled that the appellant was entitled to a cash refund of ?11,03,303 under the transitional provisions. The Tribunal emphasized that cenvat credit is a beneficial legislation and that disputes like the one in question should not deprive assesses of their benefits. The Tribunal held that the appellant, being an SSI unit with clearances within prescribed limits, should not be denied the cash refund. The Tribunal reiterated that the adjudicating authority had no powers to re-adjudicate matters already decided by the Tribunal. The Tribunal found that the adjudicating authority had not complied with the Tribunal's order and had wrongly denied part of the refund amount. Consequently, the Tribunal set aside the impugned order and allowed the appeal with consequential relief, if any.

Issue 3: Compliance with Tribunal's final order by adjudicating authority
The Tribunal stressed the importance of the adjudicating authority complying with its final orders and not re-adjudicating matters already decided. The Tribunal noted that the adjudicating authority had only conducted a personal hearing without issuing a show cause notice and had failed to follow the Tribunal's directive for the cash refund. The Tribunal found that the partial rejection of the refund was against its order and, therefore, unsustainable. The Tribunal set aside the impugned order and allowed the appeal with any consequential relief that may arise.