2019 (1) TMI 699 - AT - Central Excise

Clearance of Transmission Hardware to State Electricity Boards and also to various Mega Power Projects - N/N. 6/2006-CE dated 01/03/2006 as amended vide Notification No. 46/2008-CE dated 14/08/2008 under Serial No. 91A - Held that - In the facts and circumstances of the present case, since refund has been made in cash and not by crediting in the Cenvat Credit account of the appellant, the appellant is not getting additional credit for which it has to pay more in cash and less through CENVAT Credit Account. Thus, in effect, it does not make any difference so far, payment of Central Excise Duty is concerned - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Recovery of refund with interest due to payment discrepancy in a Central Excise case. Appeal filed against the Order-in-Original by the Revenue. Lower Appellate Authority setting aside the original order and remanding the matter for fresh decision. Disagreement over the refund payment method and its impact on the duty liability.

Analysis:
The case involves an appellant engaged in manufacturing Transmission Hardware fittings for Power Transmission lines, selling products to State Electricity Boards and Mega Power Projects without duty payment under specific notifications. A Show Cause Notice was issued for refund recovery of &8377; 1,82,901/- with interest, based on discrepancies in payment methods. The Revenue appealed the Order-in-Original, leading to the Ld. Commissioner (Appeals) setting it aside and remanding the matter for reconsideration, prompting the appellant's appeal.

The Ld. Advocate for the appellant argued that the refund issue arose from a post-audit verification discrepancy, where the Department questioned the cash payment instead of crediting the Cenvat Credit account. The appellant maintained the original refund order was correct and revenue-neutral, as duty liabilities were discharged through both cash and credit. The appellant contested the Lower Appellate Authority's decision to not only disallow the refund but also demand repayment with interest, highlighting the potential withholding of funds by the Government.

Upon review, the Tribunal found that the refund was indeed made in cash instead of crediting the Cenvat Credit account, resulting in no additional credit for the appellant. The Tribunal concluded that the method of payment did not impact the duty liability significantly, as the appellant paid the duty through a combination of cash and credit. Consequently, the Tribunal upheld the Order-in-Original sanctioning the refund of &8377; 2,12,90/- and set aside the impugned order, allowing the appeal filed by the appellant.

In summary, the Tribunal's decision focused on the technicality of the refund payment method, emphasizing that the duty liability was adequately discharged regardless of the payment mode. The judgment clarified the revenue-neutral nature of the appellant's payment practices and upheld the original refund order, ultimately ruling in favor of the appellant in this Central Excise case.