2007 (10) TMI 194 - AT - Central Excise

Availment of refund two times - Earlier, the refund was availed by making a suo moto credit entry in the PLA - Thereafter, the appellant again obtained refund by encashing two cheques, which were issued in response to their two refund applications penalty imposable u/s 11AC equal to wrongly availed refund interest also chargeable under section 11AB

Summary

Issues:
Challenge to order confirming erroneous refund, imposition of interest and penalty.

Analysis:
1. The appellant challenged the order confirming the demand for erroneous refunds of Rs. 31,488/- and Rs. 1,98,148/-, along with interest and penalty. The appellant admitted to availing the refund twice, first through a credit entry and then by encashing cheques without disclosing the previous refund. The adjudicating authority found deliberate fraud by the appellant in claiming double refunds.

2. The Appellate Commissioner upheld the penalty, emphasizing the appellant's malafide intention and failure to inform the Department about the double refund. The appellant argued that since the amounts were deposited back and not challenged, interest or penalty should not be imposed due to lack of malafide intention. However, the Commissioner disagreed, citing the appellant's concealment of material facts and fraudulent actions.

3. The Department supported the lower authorities' reasoning, citing legal precedents that mandated penalty equal to the duty determined under Section 11-AC, regardless of innocence or malafide intent. The appellant's actions of concealing the initial refund while accepting and encashing the cheques were deemed fraudulent and warranted penalty.

4. The Tribunal found that the appellant's actions clearly amounted to suppression of material facts and fraud. Despite availing the refund twice, the appellant did not disclose the initial refund, leading to penalty imposition under Section 11-AC. The Tribunal emphasized that in cases where penalty equal to the duty determined is justified, there is no scope for imposing a lesser penalty.

5. The Tribunal dismissed the appeal, stating that the appellant's deliberate actions of availing the refund twice through fraudulent means warranted the imposition of interest under Section 11-AB and penalty under Section 11-AC. The Tribunal upheld the lower authorities' decision, emphasizing the gravity of the appellant's conduct and the lack of grounds for interference with the impugned order.