2018 (9) TMI 306 - AT - Central Excise

Refund claim - Payment made under protest - Held that - The appellant has disputed the classification of their goods and the CRCL Report and sought re-test of the samples. Instead of doing so, a show cause notice dated 01.07.2016 was issued to demand the differential duty alleging that the appellant is manufacturing Jarda Scented Tobacco, but, the said show cause notice is not adjudicated till date. In that circumstances, the amount paid by the appellant during the course of investigation is not adjudged dues or duties against the appellant. Moreover, the appellant filed refund claim of the said amount paid during the course of investigation on 29.03.2017. Despite that, the adjudicating authority had not taken any pain to adjudicate the show cause notice dated 01.07.2016. Admittedly in this case, the amount has been deposited by the appellant during the course of investigation under protest and there is no dues pending against the appellant as on date, in that circumstances, the appellant is entitled for refund of ₹ 15,61,27,927/- - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Refund claim rejection based on classification dispute and pending show cause notice adjudication.

Analysis:
The appellant filed a refund claim after authorities rejected it, citing a show cause notice demanding differential duty due to alleged manufacturing of Jarda Scented Tobacco. The appellant disputed this classification and requested retesting of samples. Despite this, the show cause notice remained unadjudicated. The appellant argued that as the duty paid under protest was not appropriated and no duty was due, they were entitled to a refund. The respondent contended that the refund claim could not be sanctioned until the classification issue was finalized. The tribunal noted the lack of adjudication on the show cause notice and the absence of pending dues against the appellant. Referring to a previous case, the tribunal emphasized the need for officers to act within the law and not collect duty without quantifying evasion. Consequently, the tribunal directed the adjudicating authority to refund the amount paid under protest to the appellant within three weeks, ruling in favor of the appellant's refund claim.

This judgment addresses the key issue of refund claim rejection in the context of a classification dispute and pending show cause notice adjudication. It underscores the importance of proper adjudication and adherence to legal procedures by authorities, emphasizing the need to act within the boundaries of the law. The decision highlights the appellant's entitlement to a refund due to the absence of pending dues and the payment made under protest. The ruling sets a precedent for timely refund processing in similar cases, ensuring justice and legal compliance.