2021 (9) TMI 916 - AT - Customs

Refund of duty in cash of the amount which was paid by the appellant by using MEIS scripts - case of appellant is that the amount which stands credited under the scripts is as good as an amount in cash and the assessee is entitled for the refund - HELD THAT - This Tribunal in the case of CCE, DELHI II APPELLANT VERSUS M/S SUN PHARMACEUTICALS INDUSTRIES LTD. 2018 (1) TMI 366 - CESTAT NEW DELHI has been held that the credit which stands deposited with the Department is required to be refunded to the assessee in cash on the simple ground that the same was not recoverable from the assessee at all. Learned DR though has impressed upon that MEIS scripts and the credit lying there-under is different from the credit lying under DEPB Scheme but that issue also stands decided by this Tribunal only in the case of C C-NEW DELHI ICD TKD EXPORT VERSUS SEL MANUFACTURING COMPANY LTD 2019 (3) TMI 718 - CESTAT NEW DELHI wherein the issue of allowing the cash refund of payment made rather through DEPB Scripts was under consideration. It was held that DEPB Scripts are again the similar scripts under which the money of the assessee stands credited for his future liabilities and once there remains no more liability that amount is to be refunded to the assessee that too in cash. There are no contention in the submissions put forth by ld. D.R. Commissioner (Appeals) is also observed to be miserably silent about citing any reason for which the DEPB scripts shall be considered as different from any MEIS scripts as far as the issue of refund of amount lying credited vide those scripts to concerned - both scripts are creditable scripts hence there is no difference in the two at least for the nature of money lying credited therein and the utilization else refund thereof is concerned. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund for an amount paid via credit MEIS scripts despite ample case law supporting refund eligibility.
2. Discrepancy between MEIS scripts and DEPB scripts in the context of refund eligibility.

Analysis:
1. The appellant imported scrap and filed bills of entry for assessment based on sales invoices, but the declared transaction value was rejected, leading to reassessment at an enhanced value by the Department. The Tribunal rejected the re-assessment, prompting the appellant to seek a refund of the differential duty paid post-reassessment. The Department sanctioned a partial refund in cash but rejected the refund for an amount paid via credit MEIS scripts, leading to the current appeal challenging this decision.

2. The appellant argued that ample case law supports the refund eligibility of amounts paid via MEIS scripts, equating them to cash payments. The Department, however, contended that the case law cited by the appellant pertained to DEPB scripts, not MEIS scripts, making the cited precedents irrelevant. The Department's stance was based on the findings of the Commissioner (Appeals) regarding the nature of MEIS scripts and their distinction from DEPB scripts in the context of refund eligibility.

3. The Tribunal analyzed the issue of refund eligibility for duty paid via MEIS scripts and referred to relevant case law. It cited a Calcutta High Court judgment and a Tribunal decision emphasizing the refund of credit deposited with the Department in cash. The Tribunal highlighted the acceptance of such refund claims when the liability towards the Department ceases to exist, as in the present case where the reassessed value was rejected. The Tribunal also noted that the Department itself had allowed cash refunds in similar cases involving MEIS scripts, indicating a departure from its initial stance.

4. The Tribunal further addressed the distinction between DEPB and MEIS scripts in terms of refund eligibility. It referenced previous decisions where DEPB scripts were considered similar to MEIS scripts for refund purposes, emphasizing that once the liability is extinguished, the amount credited via such scripts should be refunded in cash. The Tribunal found no substantial difference between the two types of scripts regarding the nature of the credited amount and its utilization or refund.

5. Considering the arguments presented and the precedents cited, the Tribunal set aside the order rejecting the refund for the amount paid through credit MEIS scripts. It allowed the appeal, concluding that the appellant was entitled to a refund of the duty paid via MEIS scripts, aligning with the principles established in relevant case law and consistent Departmental decisions.